Is Ellison rooting for Microsoft?

Marc  |   Mar 19, 2008  12:14 PM (GMT)

No, these acquisitions do not make Oracle a “less innovative” company.
There are two key factors when you evaluate these acquitions.
The first is technology (or innovation). People are buying widgets, so you decide you are losing money if you don’t get into the widget business. You start to research how much it will cost you to get a team of engineers together to design and build you’re own widgets, then go compete against the rest of the (already established) widget market. After doing the math, it comes to light that it would be cheaper run to buy a leading widget manufacturer instead.
Now, suppose it will not necessarilly be cheaper but may roughly be about the same expense? Then we look at the next factor, which is market share.
If I am going to buy a widget company, why not buy one with a huge ‘install base.’ Their customers become my customers instantly, and now I can market some of my other products?

There is also a third factor and this directly benefits the customers. In Oracle’s case, they have gone out and purchased excellent products. Oracle benefits from the intellectual properties and resources that come with these purchases, and with programs like Applications Unlimited, the customer benefits from continued support of their current products.

Some of these same factors also apply in the Microsoft/Yahoo case. Microsoft sees Google making rediculous amounts of money and wants some of it. It really does not make sense for Microsoft to try to “innovate” a competitor to Google at this point in the game, and from a “name recognition” standpoint, Yahoo is definitely the best target.

Grant Czerepak  |   Mar 20, 2008  2:32 AM (GMT)

Buying existing businesses does not diminish the creativity of a company. However, to really benefit from an acquisition I would certainly recommend reverse engineering what you buy to really understand what makes it tick. Then forward engineering it to integrate into your existing products. This is becoming simpler technologically, however it still has a ways to go. Oracle has taken advantage of the fact that its own product is the foundation of many of the products that belonged to the companies it purchased. I don’t think Microsoft has the same edge with a company like Yahoo!

Rashad  |   Apr 16, 2008  11:35 AM (GMT)

What matters is that everything works and customers do not have to take a SINGLE step backwards to sustain their status quo.