Oracle added fuel to fire in the rapidly consolidating enterprise software market today with a $6.7B unsolicited bid for BEA. Here are a few quick thoughts:

• Oracle seeks to dominate middleware. Middleware platforms provide the nexus for software ecosystems. Each vendor's last mile solutions depend on a strong middleware tool and a community of individuals and solutions providers who build and extend the platform for vendors. Whoever owns the future platform, an applistructure on middleware or a SaaS platform like SalesForce will emerge as winners in the post internet era. Acquisition also marginalizes SAP NetWeaver's role as a standalone middleware solution.
• BEA customer base attractive to Oracle's vertical ambitions. BEA brings high end custom dev clients to the table. With a blue chip base of the best internal IT shops, those in telecom, financial services, and public sector, Oracle or any acquirer could cement its leadership in middleware over IBM, MSFT, and SAP. These custom development shops represent the best and brightest user base and the most lucrative.
• Oracle should expect a fight for BEA. Other vendors like SAP, IBM, and HP need BEA more than Oracle does. SAP's NetWeaver is among the weakest of middleware platforms, despite one of the strongest ecosystems. IBM will be threatened by an Oracle dominance in middleware. HP could use this as an entry point to gain traction in the market. SI's who've built a long term strategy around BEA as an independent platform may seek to assist BEA. Oracle's potential acquisition takes away the last remaining independent major middleware platform provider leaving future competitors without a large install base and a third party supplier.
• Will Fusion Apps Still be Built on Fusion Middleware or BEA? Recent rumblings about a delay in Fusion apps delivery and the future of leadership in delivering Fusion apps, add speculation to whether or not Fusion Middleware will still be the basis of Fusion apps. (See the latest from Vinnie Mirchandani). The BEA platform reaches out to more non-Oracle shops and provides a truly open platform for integration with less lock in at the meta data and process levels.

The bottom line
Oracle's long term M&A strategy centers on gaining the biggest install base around not only business applications, but also middleware. At the end of the day, its still about selling more database and gaining the largest share of the IT wallet. With so much liquidity in the market, expect continued and accelerated consolidation along key battle grounds of middleware platforms such as MDM, BI, Portals, BPM, and other Information Management tools. Don't expect the competitors or BEA to sit still!

Next up: How will Oracle deal with all the redundant technology?

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2007 by R Wang. All rights reserved