Word on the street is that Oracle is in process of killing the AquaLogic brand that BEA spent over $300 million to assemble, and probably $100 million more to market. This is a bit of a surprise as BEA had gone to extraordinary lengths to build the brand, which I would argue was much more popular than Oracle's SOA offerings.
The Register has learned from individuals close to the company that BEA's new owner Oracle is merging the AquaLogic and WebLogic professional service teams. Oracle is also splitting the AquaLogic products between "web products" - user interaction, collaboration and the Web 2.0 suite - and AquaLogic business process management (BPM). The Web products originate from the Plumtree buy in 2005 and the BPM suite comes from the Fuego acquisition in 2006, deals that totaled nearly $300m.
You have to wonder if this portends some downside of consolidation...that seems like an awful lot of money to go out the window. On the other hand, I am sure the guys who got bought out by BEA aren't complaining right now.
Tibco Software's stock has been up Monday. My sources are tying it to an unsubstantiated rumor that the company is close to being taken out.
On one hand, this consolidation thing has gotten out of control. On the other hand, it remains a great time to be an open-source company, and these types of amalgamations prove how important it is to control your software environment.
A few possible acquirers of the Palo Alto, Calif.-based maker of business software:
• Oracle--unlikely in light of the BEA finalization but anything is possible
• SAP--if anyone needs some good integration software, it's SAP
• IBM--possible, just to take Tibco out and limit Oracle
• Hewlett-Packard--unlikely in light of the EDS news
Word is that things could go hostile, which probably takes IBM out of the equation. Stay tuned.
BEA's Peter Laird just posted a great overview of Cloud Computing, SaaS, and Platform-as-a-Service PaaS for those who are still struggling to figure it out (and really who isn't?)
As always, the definitions are vague, yet arguable but I think they do a good job in establishing what we are talking about.
Cloud Computing
Cloud computing refers to the virtualization of the data center, such that server machines are not thought of individually but as just a commodity in a greater collection of server machines. Cloud computing solutions in general strive to eliminate the need for an application deployer to be aware of the actual physical machines that are used to host the application. Some have called this idea "hardware as a service".
SaaS
An application that is delivered through the SaaS model typically is done so:
-Over the internet
-Remotely by a third party, with little/no opportunity to bring that application in-house
-With a usage-based pricing model
PaaS
When a vendor offers a Platform as a Service, they are offering an integrated platform to build, test, and deploy custom applications.
Dear BEA friends,
Now that the Oracle acquisition is finally coming to pass, take your cash prize and get the hell out of there. Join us and dance on the grave of proprietary apps!
I need as many sales people and customer support engineers as we can get our hands on.
Apologies for the blatant advertisement. Consider it community service.
Oracle agreed to lift its offer to $19.375 a share in cash, compared to the company's original bid last October of $17 a share. BEA had been holding out for $21 a share. The new proposal reflects a premium of 24% over BEA's closing price on Tuesday of $15.58. The deal also values BEA at $7.2 billion, up from Oracle's initial bid of $6.7 billionWhat the hell is going on out there? (Oh, and while cash prizes are being handed out, did I mention that MuleSource has a fabulous Mule ESB and SOA Governance Platform that big vendors should be dying for? ;)
One of the things that I have noted in the past is the fact that ongoing consolidation limits the choices for IT buyers. There will eventually be a backlash against these behemoths and we'll see more open source and SaaS alternatives take the place of these giants.
Today's WSJ notes As Software Firms Merge, Synergy Is Elusive:The issue of what customers experience after a big tech merger is once again coming to the fore as the software industry undergoes its latest wave of consolidation. International Business Machines Corp. last week plunked down $5 billion to buy software maker Cognos Inc., while Germany's SAP AG recently agreed to purchase France's software maker Business Objects SA for $6.8 billion. Meanwhile, Oracle last month made a failed bid for software maker BEA Systems Inc., and has in recent years also purchased software makers Siebel Systems Inc., Retek Inc. and Hyperion Solutions Corp.Obviously, you always hope for the best but when you make a commitment to software that you don't control it should keep you up at night. You are at the mercy of the market and corporate whims.
I'm not really a huge sports guy but I do peripherally pay attention when something entertaining is going on, especially when a beloved star like Alex Rodriguez gets taken to task for unconscionable greed.
Rodriguez and Boras botched this thing from the very beginning. They alienated Yankees fans with their greed and indifference. They angered the Steinbrenners with their arrogance (and that takes some doing, considering how the Steinbrenners handled the Joe Torre situation). And they created a scenario where absolutely no one would want to root for A-Rod's success. If anything, you rooted for the Yankees, which is like rooting for Lord Voldemort.
Sounds kinda similar right? People used to like BEA and hate Oracle. But now BEA is looking like the bad guy (which is somewhat undeserved) for trying to raise shareholder value. The problem is that the level of value is unrealistic and everyone seems to know that...except BEA.
I'm not sure that BEA was greedy in holding out for more money, but it's clear that the market isn't stepping up to give them anymore. And you have to wonder what customers are thinking about the situation and BEA's near and long term viability. Considering that services were up and not license revenue, I would expect the downward license trend to continue as customers become further concerned about the future and continue to adopt open source alternatives. Customers need closure from the Oracle ordeal and it doesn't appear to be coming.
To quote ESPN.com's Gene Wojciechowski "you need two suckers for a bidding war" and BEA only has Oracle. The Oracle yacht appears to have retracted the lifeline and now BEA (despite it's strangely successful 3rd quarter) will likely get flushed away.
My post on whether BEA Systems is screwed hasn't even been up for a full day, and the company decided to one-up me with this press release, marking a 180-degree turn from everything they have been pushing for the last two years.
The company had been talking about Aqualogic as an SOA (service-oriented architecture) story, and now it's pitching it as a blog-wiki mashup: "New Web 2.0 service solutions from enterprise infrastructure software firm BEA, along with enterprise social-computing products, are designed to accelerate the next generation of user participation."
BEA is clearly trying to push outside its bread and butter, but the message doesn't make much sense in relation to how the company is positioning the rest of their products.
BEA's statement goes on to suggest that the company could also be powering buzzword-compliant Web 2.0 initiatives: "BEA's enterprise social-computing products are designed to deliver the next wave of knowledge worker productivity--vital for increased business efficiency, growth and innovation." ... Read more
MySQL's Zack Urlocker published an article called Sitting Duck, which gives you a great 13-point checklist to figure out if your company is screwed. If you do a quick analysis you can predict a bit of the future and also use hindsight to figure out if the company's strategy went sideways.
In light of all the hub-bub around Oracle trying to acquire BEA let's take a quick pass and see if the company is flailing based on a few of Zack's points.
Is everyone in your market having trouble?
No. In fact the application server/middleware/SOA space is growing at an alarming rate. The fact that Oracle wants BEA means that they see more opportunity that can be exploited and that they are more capable of generating dollars than BEA is with that product set. If we agree that BEA is struggling, they seem to believe it's because of their cost structure and not their products. Which leads to...
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