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Oracle Buyout: Bad News for BEA Customers?

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
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.