Oracle stops hinting and goes for BEA''s jugular

Oracle has been making regular attacks on BEA for years, apparently with the purpose of weakening its perception in the marketplace. Now that BEA has had to delay its financial filings, there is a short period when it will be difficult to establish the true worth of the company.

This represents a period of weakness that Oracle has been quick to exploit. BEA has made it clear that being acquired by Oracle is not foremost in its business plan (See: BEA rebuffs merger offer by Oracle) although Oracle is known for stamina when it comes to stalking prey.

>On the other hand BEA''s successful partnering with HP, suggests the combination of HP and BEA, if executed well, would create a significant force in the industry.

Some 15 or more years ago I was in the audience at an IT conference, listening to Larry Ellison describing CA as a ''bottom-feeder''. Since I was working for CA at the time this rankled a bit, but it was certainly true that CA had evolved a good business model that included acquiring end-of-life software companies where there was a substantial user base in need of ongoing support.

>The last few years has seen Oracle adopt a variation on this bottom-feeder business model - it doesn''t wait for the victim to be near the end, but puts the knife in at the first sign of weakness. In the case of BEA, Oracle has been making regular attacks on the company for years, apparently with the purpose of weakening its perception in the marketplace.

>Now that BEA has scored an own goal by having to delay its financial filings, there is a short period when it will be difficult to establish the true worth of the company. This represents a period of weakness that Oracle has been quick to exploit.

There should be no pretence that Oracle needs to fill out its product portfolio by acquiring BEA; it is more the case that if the acquisition bid is successful, Oracle will be faced with a great deal of redundancy in the product range. It won''t be easy to convince BEA''s customer base that Oracle only has their best interests at heart. BEA is a serious competitor to Oracle with some fine technology that is making it difficult for Oracle to become dominant in the middleware space - so BEA has to go whatever the consequences.

BEA has made it clear that being acquired by Oracle is not foremost in its business plan, but Oracle several times has shown its ability to worry its prey to death over a prolonged period. It therefore looks likely that BEA will ultimately be acquired - but not necessarily by Oracle.

>BEA has a strong product set, but would benefit from the additional financial stability of being acquired by a large IT vendor. If not Oracle, then which other vendors might join in the chase?

IBM would be the most obvious competition for Oracle, and it has also been very active on the acquisition trail recently. However, the same issue of product set overlap would make this equally unwelcome to BEA''s customers and board.

>However, BEA has been very successful in partnering with HP, and since HP abandoned its SOA platform foray (which it entered through the earlier acquisition of Bluestone) the two product sets have become extremely complementary. HP has waded into the SOA management and governance market through the acquisition of Mercury, but has steered clear of providing its own SOA platform.

>The combination of HP and BEA, if executed well, would create a significant force in the industry and a natural balance to the otherwise dominant IBM and Oracle.

If BEA should happen to survive the onslaught by Oracle, it would certainly be weakened by the experience and it will probably see its market share slip. This would not be good for customers, shareholders, or employees, and would probably lead towards a further acquisition attempt (by Oracle or others) being ultimately successful.

>Now might be a better time for BEA to seek a friendly acquisition by a vendor that is looking for something more positive than to simply trash the competition.