Fielding questions from government attorney Phillip Malone, Bergquist described the world of enterprise applications software as being populated principally by Oracle, PeopleSoft, and SAP. According to Bergquist, these three companies represent the only serious competitors when it comes to human-resource management and financial-management software for large companies with complex needs. And PeopleSoft, by his estimation, has been competing with increasing effectiveness. In 1995, he testified, the revenue gap between SAP and PeopleSoft and between Oracle and PeopleSoft for such applications was 7-to1 and 15-to-1 respectively. Today, it has narrowed to 3.8-to-1 and 4.3-to-1. And this while Oracle has been spending $1 billion a year on R&D, compared with $420 million spent annually by PeopleSoft.
Bergquist dismissed other possible competitors by asserting that they belonged in a different category, the so-called middle market. He characterized enterprise software maker Lawson Software as lacking key features in its products, such as automation, Unicode support, and foreign accounting models. He similarly dismissed American Management Systems, his former employer, making it out as a niche player rather than a full-fledged competitor.
Oracle attorney Daniel Wall sought to tear down the market silos Bergquist had described earlier. He brought up several companies in an effort to ascertain whether there was any clear way to determine whether these companies represented middle-market prospects or large, complex enterprises. "Are there clear dividing lines of any kind?" Wall asked at one point. Bergquist conceded that he had not seen any.
Having suggested that there's more to the enterprise application software market than the big three, Wall introduced into evidence E-mail from PeopleSoft that described American Management Systems as "a very formidable competitor and a serious threat." The introduction of additional internal documents, such as a guide to PeopleSoft salespeople offering instruction in how to "beat Lawson," further undermined the government's position that competition in PeopleSoft's market is scarce.