Posted by: Mark Fontecchio
HP vs. Oracle
The New York Post reported recently that HP’s acquisition of Autonomy and its recent steep stock price drop might make it a takeover target for Oracle. Really?
First, the story. The Post cited several unnamed sources who said that if HP’s stock continues to drop, Oracle might pounce on it. HP spinning off its PC business would presumably make it a more attractive takeover target for Oracle, which isn’t interested in the consumer space.
But what else is there? Oracle has shown that it’s not interested in the low-margin x86 server business. HP sells more low-margin x86 servers than anyone. Oracle is interested in high-margin big-box servers. HP recently announced that its Itanium-based server sales – which are its big-box servers – are suffering, at least in part due to Oracle’s decision to no longer support Oracle software on Itanium servers.
Would Oracle be interested in HP’s enterprise software? Probably, but there would be a lot of duplication, as Oracle already sells plenty of its own enterprise software.
Maybe Oracle would just be interested in capturing HP customers and pulling them into Oracle support contracts, which make up a large chunk of Oracle’s revenue. But I just can’t imagine that there would be enough there to offset having to buy a huge low-margin server business, a decreasing Unix server business and a somewhat duplicative software business to go with it.