As Foes Stew, SAP Ascends

In fact, his company launched more than 6,000 notes to customers less than two hours after Oracle announced its bid. "Our clear priority right now is the merger with PeopleSoft," said a company spokesman. "But we are, of course, remaining a great partner to our customers."

JDEC has a bit more breathing room; its fiscal third quarter doesn't close until the end of July.

Although Oracle appears to be on top of its game now, Rod Johnson, vice president of AMR Research, said the company will have to perform surgery on its image to keep the trust of customers. "SAP is looking like a saint now because Oracle's actions are far from being customer-centric," he said.

SAP is doing more than just playing good cop, said Burton. "They have methodically, and now aggressively, moved on a broader infrastructure strategy, including middleware." And an SAP that could position itself as a platform player would be formidable competition for a combined Oracle/PeopleSoft and even IBM(IBM), she said.

Good for Siebel, Too

And what about Siebel Systems, a troubled company clinging desperately to its market share lead over SAP in the CRM space?

"They are being backed into a corner," said The Yankee Group's Kingstone. The trend is for companies to offer broader and broader offerings, she said, but Siebel hasn't moved from its core business of front-office applications into the back office, where SAP dominates.

Nevertheless, Siebel Executive Vice President David Schmaier said that the merger flurry "would be good for Siebel." Why?

"This is an attempt by a struggling application provider to bolster its share by buying customers," Schmaier said. In the short run, he says, competing execs will be too busy with internal issues to go after sales.

Longer term, many PeopleSoft customers may not want to migrate to Oracle applications if the merger succeeds, Schmaier said. So his company is already developing software that will make it easy for former PeopleSoft customers to port their applications to Siebel.