Sidney Hill, Jr.: Oracle changes tactics, but not intent

The handling of its latest high-profile acquisition revealed a gentler—though not necessarily kinder—Oracle Corporation.

In fact, purchasing middleware heavyweight BEA Systems is a strong indication that Oracle has not wavered from its long-standing desire to dominate the business software landscape.

Oracle announced an agreement to pay $8.5 billion for BEA on January 16.

Oracle already is the leading supplier of corporate databases and the second leading supplier of business applications. Acquiring BEA would make Oracle the top player in the service-oriented architecture (SOA) market.

That's a big deal because the SOA, as AMR Research Analyst Ian Finley recently noted, has emerged as “the best approach for building corporate software today. As a result, it is redefining every aspect of the software market.”

Currently, the most widely used SOA platforms are Microsoft .NET, with a 59-percent share of active projects; and IBM WebSphere, which is supporting 44 percent of active projects, according to a recent AMR study. But the numbers for BEA's WebLogic (35 percent) and Oracle Fusion Middleware (31 percent) would make that combined entity the leader of the SOA software pack. “Companies that were considering stand-alone middleware solutions didn't always automatically look at Oracle,” Finley says. “With this acquisition, those companies will have to put Oracle on the list.” That's because adding BEA's WebLogic and AquaLogic platforms to its portfolio lends credence to Oracle's argument that it offers an open middleware stack that can support the linking of applications from any number of vendors. Finley says Oracle Fusion Middleware already is capable of supporting such integration, but there may be skepticism among users because Oracle is known primarily as a database and applications supplier and it is logical to assume its middleware is compatible only with those products. SAP—the leading supplier of enterprise applications—suffers from the same perception in regard to its NetWeaver middleware stack. But unlike Oracle, SAP does not sell NetWeaver as a stand-alone product. That could change, however, should SAP find Oracle selling its newly fortified middleware offerings to large numbers of SAP customers. “This definitely gives Oracle a way of getting into more SAP accounts,” Finley says. “Some SAP customers may think they actually need Oracle or BEA middleware to integrate non-SAP applications.”

The final Oracle-BEA merger negotiations were handled quietly, and that's where the gentler Oracle revealed itself.

Oracle's 2005 acquisition of PeopleSoft, for instance, remains infamous within software industry circles for the public acrimony that preceded it. This time, Oracle made a bid and set a deadline for BEA to accept. When the deadline passed without an agreement, Oracle ceased its pursuit—at least publicly. “Maybe Oracle learned something from the PeopleSoft experience, which was a long, drawn-out process that probably hurt both companies,” Finley says. Could this gentler approach make it easier for Oracle to achieve its ultimate goal of software industry domination?