With annual sales of $12 billion and a $65 billion market cap, Oracle ( ORCL) doesn't get a lot of sand kicked in its face. But Microsoft's ( MSFT) full-tilt push in the database market and SAP's ( SAP) continuing domination of the applications software market are threatening to squeeze Oracle and prompting investors to raise yellow caution flags. The multipronged offensive by two of Oracle's chief rivals follows its own purchase of nine software vendors -- a spending spree with a price tag of $13 billion (net acquired cash) that includes PeopleSoft, Retek and the still-pending takeout of Siebel Systems ( SEBL). Designed to advance Oracle's lagging applications business, the M&A binge, while boosting the bottom line, has not yet shown evidence of top-line success. Indeed, an analysis of Oracle's application business by Prudential Securities analyst Brent Thill indicates that the company hasn't gotten much for its money. By combining year-ago sales of the then-independent PeopleSoft (which had swallowed J.D. Edwards) and Retek with Oracle's organic application business, Thill found that new license revenue would have been $215 million had all three companies been under one roof. But after the combination actually took place, Oracle's license revenue was $127 million in its most recent quarter, 41% below what the companies were each doing on their own. How could so many sales dollars simply evaporate? Listen to Greg Maffei, who last week quit his job as Oracle's co-president and CFO after just four months on the job. He was asked that question at a dinner with investors and analysts shortly before he left the company. According to a source who attended the meeting, Maffei's answer was this: "One plus one does not equal two." In a less cryptic follow-up, he then reportedly said, "Oracle fired half of PeopleSoft's sales reps. It will take time to rebuild the pipeline."