Oracle offer will freeze new BEA business, analysts say

Heather Havenstein   Today’s Top Stories   or  Other Development Stories  

Real-time collaboration and development with IBM Rational Team Concert streamlines any project IT Leadership Strategy: How to Provide World-Class Help Desk Support Forrester Best Practices: Improve IT Service Delivery and Support with Remote Services Environmental Sustainability and Networking Keeping Pace with Changing Business Needs - Requirements Change Management Extend, Replace, or Convert; which is the best way forward for COBOL Applications? Sold on SOA Computerworld Report- Large Enterprises Pay More for IPAM Computerworld Technology Briefing: Intelligent Users Use Business Intelligence Sign up to receive Development Resource Alerts

October 12, 2007 (Computerworld) -- Oracle Corp's $6.6 billion bid for BEA Systems Inc. will effectively freeze the latter's efforts to gain new customers and force Oracle to face questions on how it will handle overlapping middleware product lines, analysts said today.

Mike Gilpin, an analyst at Forrester Research Inc., said BEA users could find that some of their investments in the company's middleware technology "will not be as easy to preserve going forward in areas where there's overlap between [the companies'] portfolios."

He did add, however, that "it's possible Oracle could follow a 'kinder, gentler' strategy that would not rationalize as much of the overlapping middleware platforms as would be ideal from a cost-minimization perspective, just to keep those BEA customers happy." He also noted that "many of them are already Oracle customers."

Gilpin added that Oracle may move to segment middleware customers based on the size of the company, pushing BEA products to large firms and Oracle technology to the midmarket.

"If you're a BEA customer at the high end, you'd be OK," he said. "But in the midmarket -- and in some categories where BEA is trying to expand its business, like business process management and Web 2.0 -- those products would be at risk."

Gilpin also noted that Oracle has been able to hang on to customers it gained in its acquisition of PeopleSoft because companies are typically locked in to business applications. However, he said application server users would be more likely than ERP users to look to an IBM or Microsoft to replace their BEA tools if they are not happy with how Oracle handles the acquisition.

Yefim Natis, a vice president and analyst at Gartner Inc., said that the announcement of Oracle's intentions "freezes the market for BEA, which means BEA must be sold" now. He said that other bidders may also jump into the fray to buy BEA, which has suffered several quarters of declining license revenue primarily due to the commoditization of the Java application server market.

"The technology has become easily available, and no one can really charge high prices for it," Natis noted.

He also predicted that while "new purchases of BEA technology will dramatically decrease," current BEA customers shouldn't expect a drop in support. "It will be no worse than BEA support. I don't believe there will be a reason for the installed base to dramatically run from Oracle," he said

From BEA, Oracle will get a "technically better" J2EE middleware stack along with BEA's family jewel, the Java Virtual Machine, he added.

Charles Phillips, Oracle's president, said in a statement that it would protect the investments of BEA customers if the deal moves forward. "Our continuing support commitment has been amply demonstrated with all of our previous acquisitions, including PeopleSoft and Siebel. BEA will be no different," Phillips said in the statement.

Continued...
1 | 2 | NEXT  

Print this Story

Send Us Feedback

E-mail this Story

Digg this Story

Slashdot this Story

"IoSafe is a company that, up until now, has provided enterprise-level disaster-safe storage. It is now entering the consumer market..." Read more... "A study by Careercast.com identifies the best and worst jobs, based on salary and outlook, as well as factors such..." Read more... Read more Development posts or See all Blogs

Microsoft's Web site overwhelmed by would-be Windows 7 downloaders FAQ: How to get the Windows 7 beta Google: Chrome in 'never-ending' beta More top stories...

Review: Windows 7 Beta 1 shows off new task bar, more UI goodies Elgan: Palm and Sony out-Apple Apple Memory card standard could provide up to 2TB on an SD card

The 9 hottest skills for '09 The downturn has softened the IT talent market but done little to weaken demand for SAP, .Net and other technical skills. Fast fixes for common PC problems Every computer user hits a speed bump now and then. Here are some speedy, simple solutions to hardware, software, network, Internet and mobile-device crises. Apple's 5 biggest moments in 2008 From the iPhone 3G to 'unibody' MacBooks, 2008 was a standout year for Apple. Hands-on Linux: New distro versions push the envelope We've got reviews and videos of the new Ubuntu 8.10, Fedora 10 and openSUSE 11.1. Windows 7 Get the latest news, reviews and more about Microsoft's newest desktop operating system More Continuing Coverage Windows 7 Voting Technology Google's Chrome browser Economy in turmoil: Latest news and tips iPhone 3G Bill Gates moves on Windows Vista A to Z Mac A to Z 2008 Salary Survey Find wage data for 50 IT job titles. More Special Reports 2009 Premier 100 IT Leaders 2008 Premier 100 IT Leaders 2007 Premier 100 IT Leaders 2008 Best Places to Work in IT 2007 Best Places to Work in IT 2008 Salary Survey 2007 Salary Survey 2006 Salary Survey 2008 IT Forecast 2007 IT Forecast 40 Years of Computerworld Top 12 Green-IT Users The FAQs About Going Green IT Schools to Watch iPhone: One Year Later Global Mobile Your Next Data Center Management: Reinventing IT Stop Data Leaks Web 2.0 Security Surviving Disasters Managing Storage Virtualization The Lean Storage Machine Storage on Trial Can Web 2.0 Save BI? Bypass These BI Potholes All Zones Business Continuity Zone The File Data Management Zone Security Management Zone The SAS Zone Business Intelligence and Analytics Zone The Enterprise Search Zone Software as a Service Zone The Security Zone See your link here

Computerworld Technology Briefing: Intelligent Users Use Business Intelligence Download this Technology Briefing for a limited time! (Source: Computerworld) Would you like to extend the use of Business Intelligence (BI) to more of your business functions? Would you also like to enhance your BI systems to provide both analysis and recommendations? Download this executive briefing  Best Practices for Delivering Virtual Classroom Training Download this white paper, compliments of Adobe, for a limited time! (Source: Adobe) How can you encourage people to listen, and even better, absorb your presentation? How will you know your audience is engaged? This paper provides suggestions and pitfalls that can increase your effectiveness when you're training a remote audience. Download this white paper  What's Next? Real Answers for Tough Times What's Next? Real Answers for Tough Times A crystal ball won't provide the answers you need. View this on demand webcast, compliments of Sterling Commerce, for a limited time! Go to the webcast  White Papers Read up on the latest ideas and technologies from companies that sell hardware, software and services. Learn how Xythos and Microsoft enable customers to benefit from the best of both approaches to document management and collaboration. NetApp and VMware Virtual Infrastructure 3 Storage Best Practices Environmental Sustainability and Networking View more whitepapers

• Microsoft's Web site overwhelmed by would-be Windows 7 downloaders
• Review: Windows 7 Beta 1 shows off new task bar, more UI goodies
• FAQ: How to get the Windows 7 beta
• More top stories 

Security Directions: Strategies and Tactics for Protecting Your Enterprise in 2009 Attend the Security Directions virtual event, with sessions available live on December 16, 2008 and available on-demand from December 17 though March 17, 2009. Some topics that will be covered include: Best Practices around Data Leak Prevention (DLP). What exactly is security due diligence and why does it matter? Cloud security and privacy. End-point security - rising gas prices have caused an increase in the number of remote workers, which leads to more security issues. Register now for this event that happens on December 16, 2008, but will also available on-demand from December 17 - March 17, 2009. Register Now!

• Review: Windows 7 Beta 1 shows off new task bar, more UI goodies

• FAQ: How to get the Windows 7 beta

• Windows 7 public beta to be available Friday

Read more news 

• Twitchy users, rebooting computers

• We the willing, led by the unknowing...

Read more Shark Bait 

Best Practices for Delivering Virtual Classroom Training How can you encourage people to listen, and even better, absorb your presentation? How will you know your audience is engaged? This paper provides suggestions and pitfalls that can increase your effectiveness when you're training a remote audience. Download this white paper now!