The PeopleSoft-Enlarged Oracle Applications Market Footprint - Gains and Risks

This IDC study considers the impact on the market share of key enterprise applications and customer relationship management (CRM) companies due to the acquisition of PeopleSoft by Oracle in late December 2004. For the analysis, IDC takes its most recently complete historical vendor revenue and resulting market share in the enterprise applications and CRM markets, which reflect CY03 results, adds together Oracle and PeopleSoft revenue, and regenerates market share and market rank for the applicable markets.

The results of the analysis suggests that going into 2005, Oracle has a much enlarged market footprint in several key applications markets, particularly human capital management, financial applications, business performance management, procurement, and customer service/call center on a worldwide basis. Regionally, Oracle bypasses SAP in North America enterprise applications/CRM revenue as a result of the PeopleSoft acquisition, though SAP retains a wide lead in Europe.

"Although it is interesting that Oracle has gained considerable market penetration due to the PeopleSoft acquisition in certain markets and regions, the more interesting question concerns what Oracle will do with that acquired market share going forward," said Evan Quinn, group vice president of Applications research at IDC. "To not only retain customers but also expand its market share post-2005, due to buyer's power and the highly competitive nature of the enterprise applications market, Oracle needs to take special care of PeopleSoft's customers in the human capital management and financial applications spaces during 2005."