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The big unknown in Oracles bid to acquire BEA is whether Oracle would fold BEAs middleware technology into Fusion Middleware, as there are huge overlaps in both companys offerings, or run it as a separate stack.
"The question is, which stays—Fusion or [BEAs AquaLogic middleware]? Because it doesnt make sense to have both," Wang said.
Analysts have differing opinions. AMR Research analyst Bill Swanton said the real question is what Oracle would do with BEA from a technology perspective. "If you really looked at it, BEA is a stronger finished story with its SOA platform. They are further along than Oracle," he said. "BEA has done far more major heavy transactions in the communications and finance industries than Oracle, and thats one way of looking at tapping into the customer base."
In May, Swanton released a report titled "SOA and BPM for Enterprise: A Dose of Reality" that pits Oracles technology against BEAs (along with technology from IBM, SAP, Tibco and WebMethods).
What could convince BEA to accept an Oracle bid? Read more here.
In his research, Swanton found several areas where BEAs technology is stronger than Oracles, he said. "BEAs [services] registry and repository are much more complete. They have a better user interface, better Business Activity Monitoring and slightly better business process management technology," he said.
Swanton pointed out that BEAs registry, repository, user interface, BAM and BPM technologies are all capabilities that could be directly applied to Fusion Middleware.
Joshua Greenbaum, principal of Enterprise Applications Consulting, said Oracle offers a broader integration platform than BEA. "[Fusion Middleware] comes with a tremendous amount of built-ins to the application stack that Oracle also owns," he said.
Buyout rumors have been swirling around BEA Systems for months. Click here to read more.
While a tender offer from Oracle might not be good news to BEA officials, Greenbaum said he believes it will be better received by customers. "Theyve been hanging on to a company of dwindling importance and dwindling relevance for a long time," Greenbaum said. "They will get the opportunity to get a really painless infusion of Oracle technology."
Greenbaum said he believes that Oracles motives in acquiring BEA are essentially customer-driven rather than technology-driven. "This is about locking in these customers and essentially pulling the same kind of play as theyve done in the applications space—owning maintenance and eventually moving customers over to Oracle," he said.
Oracle has indeed built up an applications business through acquisitions. In 2005 the company, in a belligerent takeover battle, acquired major ERP (enterprise resource planning) vendor PeopleSoft, which had itself just acquired another ERP vendor, JD Edwards, for over $10 billion.
While Oracle added substantially to its customer base with the PeopleSoft buy, it has continued to acquire applications companies, including Siebel Systems (for $5.85 billion) in 2006 and Agile (for $495 million) in May.
Where Oracle wins in the software deals is in its database-middleware-applications tie-in strategy—one that could work well with BEAs technology.
"The old one throat to choke perception is real here," Greenbaum said, pointing out that middleware technology is becoming more a commodity and less a strategic advantage. "At this point no one needs to be using middleware because of some religious fervor," he said.
Executive News Editor Michael Hickins contributed additional reporting to this story.
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