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SAN FRANCISCO—Oracle Corp. will complete development and ship the next version of PeopleSoft’s flagship enterprise applications even if it ultimately succeeds in buying out its competitor.

Oracle CEO Larry Ellison voiced the commitment to complete the PeopleSoft 9 product line, which is still under development, in his keynote address at his company’s OpenWorld customer conference here Wednesday.

In answering a question from the audience at the cavernous North Hall at the Moscone Convention Center, Ellison made Oracle’s clearest statement to date about what would be the fate PeopleSoft’s product line.

“We are going to invest heavily to make sure not only that we do a good job of supporting PeopleSoft 8, but we are going to be delivering the currently-under-development PeopleSoft 9,” Ellison said.

Oracle has been battling for 18 months to buyout the Pleasanton, Calif. PeopleSoft. Oracle has obtained tender offers from the holders of just over 60 percent of PeopleSoft’s common shares. But the PeopleSoft board of directors have refused to accept a buyout and kept in place “poison pill” shareholder rights provisions that effectively block a buyout.

Both companies market what are called “enterprise resource planning” applications including human resources management, financial management, accounting, manufacturing, supply chain, and others that most corporations use in one form or another.

The two companies will remain deadlocked unless Oracle convinces the Delaware Chancery Court to invalidate the poison pill or unless an Oracle-nominated slate of directors friendly to the buyout wins election in a proxy vote.

During a press conference following his keynote Ellison said claimed that PeopleSoft is misusing its poison pill defense.

“As I understand it the theory behind a poison pill is to give the board time to negotiate a deal.” It’s not supposed to be an absolute revocation of shareholders ability to sell a company, he said.

Larry Ellison also talked about Oracle Data Hubs in his keynote address Click here to read more about the scheme.

In his keynote remarks, Ellison said there has been considerable confusion and speculation about the level of support Oracle would provide for the PeopleSoft applications after a buyout. Immediately after Oracle announced its bid for PeopleSoft in June 2003, Oracle officials said they were more interested in acquiring PeopleSoft’s customer base than its technology.

However, in the keynote Wednesday Ellison dismissed as “bizarre” any assertions that Oracle would not support PeopleSoft products after an acquisition. “We are going to over support PeopleSoft customers,” He said.

After Oracle delivers the Oracle 9.0 products, Oracle will set the combined PeopleSoft and Oracle engineering teams to work building “a functionally merged product,” he said.

The merged product, Ellison said, will be so well designed that when it comes time for PeopleSoft and Oracle customers to upgrade, the transition will be “easy and graceful.”
Or at least “I mean that it will certainly be no more difficult … than past Oracle or PeopleSoft upgrades,” he said.

“We are going to invest more in the applications than Oracle or PeopleSoft could have done independently. We are going invest more in support than Oracle and PeopleSoft could have done independently, Ellison said.

The resulting merged product, Ellison said, “will be a functionally richer, easier to use and more modern product as a result.”

Ellison’s comments clarified conflicting statements made earlier in the week by Oracle co-presidents Charles Phillips and Safra Catz. In a press conference on Monday, Phillips said that the market shouldn’t look for Oracle to introduce a “superset” combination of the Oracle and PeopleSoft product lines.

To read more about Oracle’s executive confusion, click here.

Tuesday Catz said that Phillips meant that there wouldn’t be a combination of Oracle and PeopleSoft application code. However, she said that Oracle would introduce new products that combined features and functions from both company’s product lines.

Editor’s Note: Associate Editor Lisa Vaas also contributed to this article.

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