Microsoft Woos Oracle Clients

Microsoft Corp. said Monday that it was offering a 25% discount to customers of PeopleSoft Inc., which has been acquired by Oracle Corp.

The offer covers licensing of business applications such as accounting and payroll, and the first year of support programs, Microsoft said. PeopleSoft became part of Oracle last week in a $10.3-billion takeover after an 18-month battle.

Microsoft is courting PeopleSoft customers worried that Oracle won’t keep providing upgrades and other support. The discount follows an e-mail message in December suggesting that PeopleSoft clients switch to Microsoft’s database software. The tactic could hurt efforts by Oracle Chief Executive Larry Ellison to keep PeopleSoft’s 12,750 customers.

“Everyone is going in for the kill here,” said Charles Di Bona, an analyst at Sanford C. Bernstein & Co. in New York. “The competitors are not going to sit around and play nice.”

Oracle shares fell 14 cents to $13.19 and Microsoft rose 13 cents to $26.80. Both trade on Nasdaq.

Oracle is the No. 2 maker of business applications software, behind SAP. Microsoft saw sales of business applications programs rise 18% to $667 million in the year ended June 30, less than the company had hoped. That month Microsoft said CEO Steve Ballmer would take direct oversight of the unit, called Business Solutions.

Oracle spokeswoman Deborah Lilienthal declined to comment. The company has said it will support PeopleSoft products until 2013. Oracle announced last week that it was working on software that would combine features of both companies’ programs.