Friday, October 12, 2007

Oracle to acquire BEA?

I just saw that Oracle has made an unsolicited bid to acquire BEA - it's a smart move, though far from unexpected. At Ovum I was the RD (Research Director) covering Oracle and remember when in open court Oracle's acquisition targets were revealed - top of the list BEA..

What makes this interesting is that SAP moved to acquire Business Objects just a few days back for almost exactly the same amount of money $6.7 Billion. SAP has no history of managing large acquisitions and market observers were deeply critical of the move, questioning SAP's ability to manage such a deal.

By moving for BEA, Oracle place SAP in a tough situation - do they counter bid - or watch Oracle move in to a clear lead ahead of them? If they counter bid they will be in a bidding war with Oracle who's pockets are deep, and its ability to absorb acquired assets legendary. If they get into a bidding war, what if Oracle simply walks away when the price get's too high (as they always do) and leave SAP to deal with two highly complex and very expensive acquisitions, that they may stuggle to manage?

If Oracle wins, they become the leading Middleware provider ahead of IBM and Microsoft and leave SAP in it's wake. If others come into the fray and bid against Oracle it could look like a desperate attempt to block Oracle.

Oracle vs SAP is fun and made for spectators....This latest move by Mr Ellison made me smile the second I saw it - they must be cursing him (again) in Germany. It's not the fact that Oracle is moving to acquire BEA it's the precision timing that brings about the smile.

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