Oracle’s acquisition of BEA Systems Inc. is likely to make the merger-happy database and business applications giant the market leader in enterprise middleware, and IBM and SAP are unlikely to take the threat lightly, according to one IT industry expert.
“SAP’s NetWeaver is among the weakest of middleware platforms, despite [the fact that it is part of] one of the strongest ecosystems,” said Ray Wang, a senior business applications market analyst with Cambridge, Mass.-based Forrester Research Inc. “[And] IBM will be threatened by an Oracle dominance in middleware.”
Oracle’s planned $8.5 billion takeover of BEA also highlights just how important middleware is to the big players’ software marketing plans.
“Each vendor’s last mile solutions depend on a strong middleware tool and a community of individuals and solutions providers who build and extend the platform,” Wang said. “[The] acquisition also marginalizes SAP NetWeaver’s role as a standalone middleware solution.”
Wang added that Oracle probably sees BEA’s attractive customer base as a means to further its “vertical ambitions.”
“BEA brings high end custom development clients to the table,” Wang said. “With a blue chip base of the best internal IT shops — those in telecom, financial services, and public sector — Oracle or any acquirer could cement its leadership in middleware over IBM, Microsoft and SAP. These custom development shops represent the best and brightest user base and the most lucrative.”
The bottom line?
“Oracle’s long term merger strategy centers on gaining the biggest installed base around not only mission critical applications, but also middleware,” Wang said. “At the end of the day, it’s also about selling more database and gaining the largest share of the IT wallet. We expect accelerated consolidation along key battle grounds of middleware platforms such as Master Data Management, business intelligence, portals, business process management, and other information management tools. Don’t expect the competitors of BEA to sit still.”
Do Wang’s points make sense? Is Oracle a good fit for BEA? Let us know.