This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Oracle Shakes Up Software

Whether it succeeds or not, Oracle's (ORCL - Get Report) unsolicited $5.1 billion attempted buyout of PeopleSoft (PSFT) is shaking up the software industry and may well give even more impetus to a gathering M&A wave.

In the short run, the bid floated a number of software boats on Friday, including those of competitors SAP (SAP) and Siebel Systems (SEBL). SAP, the leading supplier of software to manufacturers, added $1.32, or 4.5% to $30.72. Siebel, the troubled developer of customer relationship-management software, was up 10% at one point, but slipped and closed the day up just 19 cents, or 1.7% to $10.98.

Why is SAP suddenly looking even better than usual? That's because Oracle said that if its bid is successful, it will not continue to develop new PeopleSoft applications or integrate the two product lines. And that could mean a lot of angry and confused customers thinking about whom they really want to buy sofware from.

"They might not be willing to put all their eggs in the Ellison basket," said David Reynolds, head of European Technology Research at J.P. Morgan in London.

Peter Dominy, an industry analyst with the Yankee Group, agreed, saying, "This could be a significant opportunity for SAP." He added, however, that whom to switch to is a complex decision, and would depend on the license terms Oracle and SAP present, and the specific applications customers are running.

Asked if SAP might be looking for acquisitions in the immediate future, spokesman Markus Berner said the company is sticking to its policy of "adding know-how and technical expertise instead of acquiring customer base or market share.

As for Siebel, it could be a take-over target by Oracle if the PeopleSoft deal falls through, or by another company, such as IBM (IBM), seeking to defend itself against the beefed-up Oracle if the buyout succeeds. Some analysts discounted that, saying Siebel is more likely to buy someone else as it struggles to survive, than to be bought.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
PSFT $0.02 -20.00%
ORCL $37.59 1.90%
AAPL $110.78 0.36%
FB $94.01 2.11%
GOOG $641.47 2.32%


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs