Sun Tzu, a Chinese general, circa 500 B.C., wrote a collection of essays called The Art of War. His philosophy has lasted through the ages, influencing generals and foreign ministers.

But as is typical in modern business, Sun Tzu is a popular guide for hard-charging CEOs -- perhaps the most notable being Larry Ellison, the samurai warrior of Oracle (NASDAQ:ORCL).

Of course, in corporate wars, the battle is typically waged in the press, with the support of high-paid lawyers, investment bankers, and PR flacks. Somehow, in these battles, the winners and losers all tend to walk away with millions.

Ellison believes that there are simply too many enterprise software companies and that there will be a relentless Darwinian struggle to weed out the weak. No doubt, he believes Oracle will be one of the survivors.

So, when PeopleSoft (NASDAQ:PSFT) purchased JD Edwards, it was a validation of Ellison's vision. The problem: Oracle was not involved. So, why not try a hostile takeover of PeopleSoft?

In theory, a hostile takeover seems fairly straightforward, especially when you have the immense resources of Oracle. But, in corporate warfare, it is not necessarily the big that win.

PeopleSoft put in place a defensive fortress in the form of a poison pill. Then, the company wasted no time with its integration of JD Edwards.

Oh, there is also help from the antitrust laws, which seem to be enforced more nowadays. And, perhaps most importantly, PeopleSoft cleverly offered assurances to customers that, in the event Oracle did win, they would get refunds anywhere from two to five times the licensing fees paid. This helps keep customers from leaving, while at the same time making the hostile bid extremely expensive.

Oracle is suing over the refunds. But this is doomed to fail in court. PeopleSoft's refund policy appears well within its discretion.

If the refunds stay, Oracle has indicated that it might be "forced to abandon its bid."

Sun Tzu would be proud -- of PeopleSoft, that is.

Are you proud of PeopleSoft? Pulling for Oracle? Discuss it on our discussion boards (no swords, please). Click here for a free trial. Tom Taulli can be reached at tom@taulli.com .