Tit for tat, or
Larry Ellison's plan to dominate the world
No sooner had German enterprise software company SAP finally made a major purchase, when its mortal rival (and serial acquirer) Oracle took the plunge once again. This time it was a hostile bid for US-based BEA Systems, The bid is for $6.7 billion/.
BEA is a major player in the business of server software support and maintenance, the so-called middleware market. The biggest competition currently is IBM. Its software is geared to supporting secure transaction processing, a critical area for many corporations. Its clients are in the financial, retail, and telephone industries. Its expertise is in helping one application talk to another, whether mainframe of microcomputer-based.
It can be argued that BEA is a vital buy for oracle, in that oracle, which is still busily integrating systems like Siebel and PeopleSoft into the Oracle product line in what it calls its "Fusion" strategy, needs to offer a migration path to current customers. BEA's expertise in helping companies make just such transitions and in integrating software.
This is probably not the end. BEA's board has rejected Oracle's bid. SAP, IBM, and Hewlett-Packard are all possible bidders. SAP, with its recent $?? billion acquisition of Business Objects SA, might seem like an unlike bidder as it has so much on its plate. It has already signaled its intention not to join the bidding. On the other hand, Oracle's bid (over 25% above current stock prices) may be generous enough to scare everyone else off.
Oracle has made 35 takeovers over the past there years, for a total of around $25 billion. The BEA would be bigger than its fee for taking over rival PeopleSoft in 2005. As reported in on the website Mycustomer.com ("Here we go again!", 10/16/07),
Oracle's move was planned years ago. "Three years ago, an internal document from the software group surfaced in court. It listed eight rivals Oracle wanted to acquire - one of them was BEA."
As with earlier purchases, Oracle's strategy is to buy out successful but agnostic service providers to large corporations. Currently BEA supports both Oracle sites and SAP sites. Oracle is hoping that getting BEA will help it pry away some corporate customers who value their BEA connection more than they do their Sap connection.
7:00:21 PM 
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