Oracle is 'the new IPO"
The Wall Street Journal has some sobering news for start-ups looking for a big exit: Oracle is "the new IPO," and it's paying pennies on the dollar.
"If I was in their shoes, I would ride it out" and try not to sell.
That's the advice of Sonny Singh, one of Oracle's chief deal makers, but it's advice that cash-strapped start-ups are increasingly incapable of heeding. Oracle and other cash-rich companies, including Cisco Systems, Apple, Microsoft, and SAP stand to benefit.
As The Wall Street Journal points out, with fewer big companies left to buy, Oracle is focused on smaller acquisitions of companies earning less than $750 million in revenue. The strategy seems to be to buy products that will help drive database sales (68 percent of its revenues today) but also complement its growing applications business (32 percent of its revenues today).
One thing that Oracle could also use? Open source. As successful as Oracle has been, one area that it still needs to improve in is reducing its cost of customer acquisition. Open source would provide a way for Oracle to seed and discover new accounts without the bulk of an expensive sales force.
The good news? Oracle doesn't have to buy any open-source companies to achieve this. Open source, of course, is just a license change away. But I suspect that the company would have an easier time accepting open source as a strategy with acquired products, rather than open-sourcing its own.
Regardless, with cash to burn, Oracle is in the cat bird's seat in a recessionary economy. It will be interesting to see how its strategy plays out.
Follow me on Twitter at mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
P.S. I don't think a Pulitzer prize has ever been awarded to anyone that used "catbird seat" in their research. So perhaps I'm well on my way.
Anyway, thanks for playing. You matched my apparent "lack of research" with your own. We're even!
- by JiriKlouda February 25, 2009 9:25 AM PST
- I'd suggest to take a look at oss.oracle.com. Oracle has been heavily involved in Linux kernel development and also has it's own distribution, but it does not end there. It is also very much contributing to the Apache, Eclipse and MySQL projects. There are countless minor projects as well. That is just the official part. Unofficially Oracle developers contribute to many OSS projects, which is mostly supported by the development managers. Oracle also does a lot for Open Source by embracing open source technologies and building products on top of them to propagate their use in enterprise. Hardly any other company does that to the extent Oracle does. You could also mention the support for Open Standards at every step. IBM and HP are hardware companies, not software, still Oracle in my opinion at least matches their level of involvement. It far surpasses anything Microsoft does for OSS. Was mentioning Microsoft a joke? That company actively hinders open source projects. But try to compare Oracle with for example SAP or other major software companies.
- Reply to this comment
-
(4 Comments)