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PeopleSoft Picks IBM, Pokes Oracle

Undeterred by Oracle Corp.'s (Nasdaq: ORCL) hostile takeover bid, PeopleSoft Inc. (Nasdaq: PSFT) has forged a major alliance with IBM Corp. (NYSE: IBM) to combine the WebSphere platform with Peoplesofts applications (see PeopleSoft, IBM Announce Alliance).

The partnership, unveiled at PeopleSoft’s Connect user conference in San Francisco yesterday, comes less than two weeks after the Oracle bid received a boost from a U.S. District Court judge (see Oracle Prevails in Antitrust Lawsuit and PeopleSoft Comments on Court Ruling).

So far, however, PeopleSoft has resisted the bid, and the company has now teamed up with one of Oracle's biggest rivals. Under the terms of the IBM deal, reportedly worth $1 billion over five years, PeopleSoft will integrate IBM middleware and development tools into its portfolio of applications.

The two firms will initially target the banking, financial, insurance, and telecommunications sector with their joint offerings, which will be formalized sometime in the fourth quarter.

The move could be a shrewd one by PeopleSoft, particularly given the popularity of IBM’s WebSphere family of middleware products, which provides Web-enabled access to software applications.

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