Microsoft does compete in the enterprise applications space, Oracle has claimed one day before a top Microsoft executive is scheduled to testify the exact opposite in the US government's case to block Oracle's takeover of PeopleSoft.

In a white paper distributed to reporters by Oracle, it claims there are numerous competitors, including Microsoft, the world's largest software maker in the ERP market. Microsoft already competes and will become an even bigger foe when it completes the rebuilding of its applications onto a single code base - its "Project Green" - the company swears.

This of course has nothing to do with the fact that the US government's case rests on the argument that an Oracle-PeopleSoft merger would stifle competition, resulting in higher prices, because Oracle, PeopleSoft and SAP are the only real options for buyers.

The white paper was written before the revelation two weeks ago, and just prior to the trial's start, that Microsoft had approached SAP late last year for a possible takeover. The talks ended several months ago after Microsoft decided the deal and the post-union integration would be too risky.

Oracle lawyers have pounced on the news, offering Microsoft's talks with SAP as evidence of the competitive nature of the business software market. The US Department of Justice, unsurprisingly, spun it around, saying that Microsoft's overture shows the software giant is not currently an enterprise application software player and that there is a high barrier to entry.

Microsoft senior VP Doug Burgum is scheduled to take the stand Wednesday as the government's final witness in the case. Burgum, who heads Microsoft Business Solutions, is expected to testify that Microsoft is aiming for small and medium-sized businesses, not the large and complex enterprises to which SAP, Oracle and PeopleSoft sell their products.

"Our focus has been and continues to be on the small and mid-size market," Microsoft spokesman Jim Desler said yesterday. As for Burgum's testimony, Desler said the executive will respond to all questions that are asked.

Oracle argues not only that Microsoft plans to sell to larger businesses, but that it already does so. The white paper lists several multi-billion-dollar, multi-national companies that use Microsoft software to run their businesses, including office supplies vendor Esselte and theme park company Six Flags.

Microsoft began edging into the ERP market by purchasing Great Plains Software in 2000 and Navision in 2002. The companies were combined to form Microsoft Business Solutions. The latest version of Great Plains, 8.0, was announced this week.