Surprise! Oracle buys BEA Systems

TalkBack 1 of 9:

Next »

• Thread View
• Flat View

No surprise at all...was inevitable, only question was price

Clearly, the price was much negotiated.

If you look at BEA's financials, you would see BEA has actually been going sideways for many years now. License revenues are going down, services subscriptions are the lions share of total revenue. With rare exceptions, BEA has mostly failed to create successful new products to augment/replace their mature cash/cow products like WebLogic Server and Tuxedo. There are a variety of reasons that new products haven't succeeded, but Oracle's management style will definitely fix those, one way or another. In the mean time, Oracle is thriving, to say the least, but Oracle has long since reached the point of requiring huge acquisitions to grow...once you are as big as Oracle, organic growth is simply too slow to meet investor demands.

One of BEA's assets is a huge and highly profitable services revenue base. Larry Ellison has been quite clear that Oracle's growth strategy was to build highly profitable services. Larry even told the Financial Times a while back that Oracle was going to convert to a 100% services (read subscription) business model, just as other software behemoths (see recent Microsoft announcements) are doing. The addition of almost a billion dollars of very profitable services revenue goes almost straight to Oracles bottom line.

BEA's end was sealed back when Carl Ichan took a 14% ownership position (a lot of it through options between $7-8) last summer and fall. Carl is famous for seeing latent high value and making something happen...BEA is merely one of his many successes.

Posted by: andy101   Posted on: 01/16/08 You are currently: a Guest | Members login | Terms of Use

Alert moderator to an offensive message

Subscribe to this discussion via Email or RSS

SponsoredWhite Papers, Webcasts, and Downloads

• Breaking DB2 Platform Barriers Quest Software Are you supporting DB2 on multiple platforms? In this Quest white paper ... Download Now
• Addressing Compliance Requirements for Privacy, Data Retention, and e-Discovery Trend Micro Protecting individual and financial data, retaining data, and meeting ... Download Now
• Building the Virtualized Enterprise with VMware Iinfrastructure VMware VMware virtualization software has been adopted by over 120,000 enterprise ... Download Now