It’s probably a sign of our times that we view BEA Systems Inc. as a little fish unable to defend itself against larger predators in the software industry ocean. According to its 3rd quarter financial report, BEA is on track to rake in $1.5 billion this year. It still needs to prove in the 4th quarter it hasn’t been crippled by Oracle Corp.’s $6.7 billion October takeover bid, which it rejected, but a conversation I had last week with a BEA customer proved enlightening.
The customer in question, a CTO whom I contacted on a totally separate matter and wished to remain anonymous, believes BEA’s approach to technology can help it weather this storm.
“They adhere to standards and their tooling is open enough that we see no reason to stay away,” he said. “If a change we didn’t like occured after a takeover, we don’t feel like we’d be locked in with BEA. They get loose coupling. We could unplug from them if we had to.”
His basic argument was that BEA has become open enough and embraced heterogeneity to the extent that it can continue to compete for customers based on functionality. It’s got a service-oriented defense system.
“We need technology that works,” he said. “This takeover drama might be interesting to Wall St., but it has nothing to do with my projects. From a user standpoint, BEA was in more trouble four or five years ago when we weren’t sure if they were going to embrace more open systems. They did and because of that we’ll continue to look at them.”
He reinforced what we already know, BEA has proven successful at selling software during the past decade and it shouldn’t be taken for granted that users will stay away from a vendor that has delivered for them in the past. This isn’t some overly leveraged wannabe without the means to support itself. BEA has been a viable player in the app dev space.
Here’s something I wrote in October about why Oracle might want BEA:
While there’s massive overlap between BEA’s offering and Oracle’s Fusion line, BEA does have three particular strengths that Oracle might be looking to leverage: data services, internal portals and external transactions. Those were the three most popular types of service-based applications our users reported they are either working on or plan on undertaking in the next year. Even more importantly, the demand for these types of applications increased sharply with respondents who reported their companies had achieved some measure of architectural maturity. In other words, the farther along users are with SOA, the more important those projects are likely to become.
BEA has its AquaLogic Data Services Platform, it has its WebLogic Portal product as well as the portal functionality it acquired when it bought Plumtree Software in 2005, and it has the Tuxedo transactional business on which it built itself. So the BEA goose might be sitting on a few golden eggs … and that’s not a bad pet for a would-be giant to have.
Yet if that’s a good set strengths for Oracle to buy, then it’s also a good set of strengths for BEA to have. If a user has a data services, portal or transactional project in the works, then BEA (which reports that more than 60% of its revenues are derived from services) stands to be a player.
While the Oracle bid surely staggered BEA, don’t be surprised to see BEA do a fair job of fighting back this quarter. The fact that it has enough going for it to be a takeover target also means it might have enough going for it to fend off Oracle’s advances.