Oracle’s bid to take control of middleware provider BEA Systems Inc. appears to be off for the moment. But it wouldn’t surprise me if we heard more about another Oracle attempt to take over the company in the near future.
I recently got an e-mail from Forrester Research Inc. principal analyst Ray Wang, who had some interesting thoughts on what an Oracle-BEA merger would mean for the IT marketplace and for Oracle. Here’s what he had to say:
From Ray Wang:
Oracle added fuel to fire in the rapidly consolidating enterprise software market recently with its $6.7 billion unsolicited bid for BEA. Here are a few quick thoughts:
Oracle seeks to dominate middleware
Middleware platforms provide the nexus for software ecosystems. 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 for vendors. Whoever owns the future platform, an applistructure on middleware or a SaaS platform like SalesForce will emerge as winners in the post Internet era.
BEA brings high end clients to the table
With a blue chip base of the best internal IT shops, those in telecom and financial services, Oracle or any acquirer could cement its leadership in middleware over IBM, MSFT, and SAP. These custom development shops represent the best and brightest user base and the most lucrative.
Oracle should expect a fight for BEA
Other vendors like SAP, IBM, and HP need BEA more than Oracle does. SAP’s NetWeaver is among the weakest of middleware platforms, despite one of the strongest ecosystems. IBM will be threatened by an Oracle dominance in middleware. HP could use this as an entry point to gain traction in the market. Oracle’s potential acquisition takes away the last remaining independent major middleware platform provider leaving future competitors without a large install base and a third party player.
Will Fusion Apps Still be Built on Fusion Middleware or BEA?
Recent rumblings about a delay in Fusion apps delivery and the future of leadership in delivering Fusion apps, add speculation to whether or not Fusion Middleware will still be the basis of Fusion apps. The BEA platform reaches out to more non-Oracle shops and provides a truly open platform for integration with less lock in at the meta data and process levels.
The bottom line
Oracle’s long term M&A strategy centers on gaining the biggest install base around not only business applications, but also middleware. At the end of the day, its still about selling more database and gaining the largest share of the IT wallet. With so much liquidity in the market, expect continued and accelerated consolidation along key battle grounds of middleware platforms such as MDM, BI, Portals, BPM, and other information management tools. Don’t expect the competitors or BEA to sit still!