Oracle Gets BEA: Coping Tips for Both Customer Camps

With the deal done, BEA customers contemplate their fate. Which camp made out better, and what should CIOs and IT managers be doing to prepare for the new era of middleware?

After fending off Oracle's advances since October 2007, BEA Systems acquiesced to Redwood City's latest offering of $8.5 billion, which was nearly $2 billion more than Oracle's original October bid. CIOs and IT departments must get ready for a year of confusion, analysts say, as product sets, sales teams and engineering organizations get sorted out. But there are smart ways to cope.

MORE ON Oracle

Oracle to Buy BEA

Oracle's Takeover of BEA Would Reduce Enterprise Software Choices

Five Business Process and Application Trends for 2008

The announcement of the deal came as little surprise to anyone who follows the industry or is the least bit familiar with Oracle's modus operandi. Can anyone remember the last time Oracle made a serious bid for a company that it wanted to acquire and didn't get its target? "I cannot think of a case," says Mike Gilpin, a VP and research director at Forrester Research who follows middleware.

Like JD Edwards, PeopleSoft, Siebel, Hyperion and many others before it, BEA management took the money. For Oracle and its customers, the acquisition will fill several holes in its middleware product line, such as Java-based development tools and service lifecycle management, says Gilpin. In addition, Oracle CEO Larry Ellison said that BEA's products "will significantly enhance and extend Oracle's Fusion middleware software suite" in the announcement.

To Gilpin, though, this latest deal and the year of splashy acquisitions by the major technology vendors that preceded it in 2007 have significantly altered the playing field. He describes a cumulative "psychological impact" of the deals that will affect CIOs' strategies going forward. "Until now, you could fool yourself into thinking that if you were a buyer of middleware technologies that the world was pretty much like it had always been," he says. "That there's a lot of choice [in the market], that choice matters, that some products were better than others, and that you should be buying the better products."

But that has all changed, he says. With all of the acquisitions, buying software is all about "channels" and "camps" now: Who are the partners and solution providers in your vendor's stable? "The size of the partner channel and the ways that vendors can offer comprehensive solutions and linkages to application portfolios—those are more important now [than just the best one-off product]," Gilpin says. "And that's clearly playing to the advantage of the big multiplay firms, like Oracle, IBM and Microsoft too."

1 2 Page 1
Page 1 of 2
Download CIO's Roadmap Report: Data and analytics at scale