There should be no pretence that Oracle needs to fill out its product portfolio by acquiring BEA; it is more the case that if the acquisition bid is successful, Oracle will be faced with a great deal of redundancy in the product range. It won’t be easy to convince BEA’s customer base that Oracle only has their best interests at heart. BEA is a serious competitor to Oracle, with some fine technology that is making it difficult for Oracle to become dominant in the middleware space – so BEA has to go whatever the consequences.
BEA has made it clear that being acquired by Oracle is not foremost in its business plan, but Oracle several times has shown its ability to worry its prey to death over a prolonged period. It therefore looks likely that BEA will ultimately be acquired – but not necessarily by Oracle. BEA has a strong product set, but would benefit from the additional financial stability of being acquired by a large IT vendor. If not Oracle, then which other vendors might join in the chase?
IBM would be the most obvious competition for Oracle, and it has also been very active on the acquisition trail recently. However, the same issue of product set overlap would make this equally unwelcome to BEA’s customers and board.
However, BEA has been very successful in partnering with HP, and since HP abandoned its service-oriented architecture (SOA) platform foray (which it entered through the earlier acquisition of Bluestone) the two product sets have become extremely complementary. HP has waded into the SOA management and governance market through the acquisition of Mercury, but has steered clear of providing its own SOA platform. The combination of HP and BEA, if executed well, would create a significant force in the industry and a natural balance to the otherwise dominant IBM and Oracle.
If BEA should happen to survive the onslaught by Oracle, it would certainly be weakened by the experience and will probably see its market share slip. This would not be good for customers, shareholders or employees, and would probably lead to a further acquisition attempt (by Oracle or others) being ultimately successful. Now might be a better time for BEA to seek a friendly acquisition by a vendor looking for something more positive than simply to trash the competition.
Source: OpinionWire by Butler Group (www.butlergroup.com)
