Menu
BEA faces future after failed Oracle bid

BEA faces future after failed Oracle bid

Research analysts do not see many options for the middleware vendor

Oracle's US$6.7 billion offer for BEA Systems expired last Sunday leaving the door open for other potential suitors of the middleware vendor.

But those interested entities would have to be willing to fork out a price closer to BEA Systems' expectations, said George Goodall, senior research analyst with London, Ontario-based Info-Tech Research Group.

BEA Systems considered Oracle's bid too low, preferring instead a price of approximately US$8.3 billion. The company, however, has received no other public bids.

The next obvious suitor to BEA Systems is IBM, said Goodall, but he added that likely won't materialize as BEA's products compete directly with IBM's WebSphere integration software.

Next in line after IBM are service organizations, like Hewlett Packard and CA, he said, given their availability of capital and the fact that they're in an "acquiring mode".

Despite this, Goodall doesn't believe either of those vendors would benefit by purchasing BEA, because HP's and CA's recent acquisitions have focused primarily on bolstering their professional services practice -- moves that don't align with BEA Systems' infrastructure offerings.

"There's not the same kind of professional service bonus or synergy that HP could leverage. So I don't see a lot of options there," he said.

Besides, HP is already good with its services-oriented architecture (SOA) and integration offerings, therefore acquiring BEA Systems "wouldn't be as huge a fit, but it would be a pretty good fit," said David O'Connell, senior analyst with Nucleus Research.

Furthermore, he added, HP has a less attractive customer base given it isn't an ERP vendor.

CA, on the other hand, would be challenged to integrate BEA into its product offering in a way that would be better than what it's done with past partnerships, said O'Connell. "They've got a lot of SKUs and a lot of overlapping SKUs and I don't know how they could buy BEA in a way that would be good for both companies."

A union between SAP and BEA isn't likely either because SAP's NetWeaver platform is a direct competitor to many BEA products, said Goodall.

At any rate, he said the BEA space is a not a good strategic move for SAP against rival Oracle given the few Oracle implementations atop the BEA platform, making it difficult to grab additional market share.

"And [SAP] just doesn't have a lot of experience moving into large acquisitions. Business Objects is going to be their largest acquisition," said Goodall.

SAP's lack of experience with big acquisitions makes it a weak candidate for a potential parent company to BEA, agreed O'Connell. Furthermore, its recent purchase of Business Objects means "they've got a lot on their hands right now as it is".

Actually, knowing the middleware vendor's organizational structure, it's hardly surprising to Goodall that BEA Systems declined what he perceived to be a "fair deal". "They're notoriously, both at the board and the executive level, for being an insular company."

BEA Systems had "visions of grandeur" based on the valuation from RedHat's acquisition of JBoss, he said, but added the reality is that BEA Systems is not at all comparable to JBoss as much as the middleware vendor may think so.

In the next 18 to 24 months, Goodall predicts BEA will be back on the market at less than US$17 a share, which is the amount offered by Oracle.

A BEA-Oracle partnership would have made "a really good match", thinks O'Connell, because Oracle has a lot of customers who need help with integration and BEA specializes in integration and SOA. "So there would have been plenty of room to run and play and grow as part of Oracle."

"I think they should have found a way to get to a number that they could both agree on a little better."


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments