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Ellison Says SAP Licensing Would Have Cost $4 Billion

Oracle Corp.’s Chief Executive Officer Larry Ellison testified SAP AG might have paid $4 billion to license Oracle’s software and taken 30 percent of its PeopleSoft unit’s customers by having Oracle applications.

Ellison took the stand today in the U.S. trial where Oracle is seeking at least $2.3 billion in damages for what a former SAP unit acknowledges were fraudulent downloads that infringed Oracle copyrights. Oracle, the second-largest maker of software for business applications behind SAP, sued its competitor in 2007.

“If they could get that software for nothing, we would have a hard time paying our employees,” Ellison said in Oakland, California, federal court when asked by his lawyers what would happen if Oracle couldn’t protect its investments in software research and development.

Oracle claims SAP downloaded the software to avoid paying licensing fees and to steal Oracle customers.

On cross examination by SAP’s attorney, Ellison was asked whether he knew why any customer left Oracle for SAP’s subsidiary.

No Specifics

“No, I don’t know the specifics of any particular customer,” Ellison said.

The SAP software maintenance unit that downloaded the software garnered about 300 customers, Ellison said when asked by SAP attorney Greg Lanier for the number of customers taken by the SAP unit.

Photographer: Kim White/Bloomberg

Oracle Corp. Chief Executive Officer Larry Ellison arrives at federal court. Close

Oracle Corp. Chief Executive Officer Larry Ellison arrives at federal court.

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Photographer: Kim White/Bloomberg

Oracle Corp. Chief Executive Officer Larry Ellison arrives at federal court.

“That’s nowhere close to 20-30 percent of the PeopleSoft customer base, is it?’” Lanier said.

“No,” Ellison replied.

He was read an interview that Lanier said Ellison had with CNN after the PeopleSoft acquisition in which the chief executive said, “We are after their money.”

“I absolutely deny saying that,” Ellison said.

Last week, former Oracle President Charles Phillips, who resigned in September, told a jury the company would have sought at least $5 billion in licensing fees from SAP AG for access to its software.

The case is Oracle Corp. v. SAP AG, 07-01658, U.S. District Court, Northern District of California (Oakland).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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