Oracle Buyout: Bad News for BEA Customers?

Oracle says that it's most interested in BEA's application server and messaging. Where does that leave its SOA products?

January 17, 2008

2 Min Read
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The downturn in the stock market has been good for Oracle, which announced today that it is buying BEA Systems for $8.5 billion, or $7.3 billion net of BEA's cash hoard " about halfway between its original offer in November and what BEA's board had wanted. Oracle says that the two companies' technologies are complementary, but there's a lot of overlap in the SOA space. Customers of both will be understandably concerned about which products Oracle plans to keep.

According to Oracle, it was most interested in BEA's WebLogic application server, messaging platform and industry-specific deployment patterns. The app server fills an important gap in Oracle's line. It's also the area where BEA has been most innovative, with a version that can run directly under VMWare. The future of BEA's AquaLogic SOA middleware is much less clear, with the registry, repository and enterprise service bus all offering very similar functionality to existing Oracle software.

However, Oracle's history with PeopleSoft shows that it doesn't buy competitors just to kill them. Its own SOA offerings are also built largely through acquisition, so it has a successful record of integrating different SOA components into a cohesive software stack. The relatively open and standards-based nature of SOA and Java ought to simplify the integration, though it will likely take at least a year going by Software AG's experience with webMethods.

Larry Ellison pointed to Java's open approach when announcing the acquisition, contrasting it to Microsoft's proprietary .NET stack. However, the biggest competitor is IBM, which WebLogic and JRockit will enable Oracle to face across the entire SOA stack. IBM has recently been doing well with its industry-specific products, so BEA's equivalents will also help Oracle once they are fully ported. The other players in the Java space are Sun and Red Hat, who along with IBM will likely see a short-term boost thanks to customer uncertainty.

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