Database, middleware and application software behemoth Oracle used to think buying struggling rivals was pointless. CEO and founder Larry Ellison would argue that he never saw one that warranted the corporate effort.
Why not just wait till someone else buys the competitor or better still it goes bust, he would argue. In that way, as a vendor, you have a better-then-even chance of inheriting the disillusioned customers as support for the acquired products is wound down and antipathy for the acquirer grows. Certainly, in the database software world, that was the reason he shied away from the opportunities to buy Ingres, Interbase and plenty of others in the 1990s.
But five years ago, Ellison changed his mind about all that, with the realisation that the software market was about to go through a classic market consolidation, and that Oracle would have to be one of the consolidators or one of the consolidated. He choose the former, and has since instigated over 50 acquisitions, including some of the most bitterly fought hostile bids the software sector has ever seen.
Oracle’s last hostile move – the October 2007 bid for middleware vendor BEA Systems – was greeted with some trepidation by many BEA customers. And many of those, like BT, Cadbury Schweppes, GlaxoSmithKline, the Highways Agency and Unilever, have had to sit tight for the last 10 months (the deal was only completed in April after months of bitter wrangling), wondering what Oracle planned to do with the BEA products that some had spend seven or eight figure sums on.
Indeed, only in the last few weeks has it become clear what Oracle intends to do with the BEA portfolio. What is also clear from the series of announcements and customer briefings is that Oracle has learnt how to manage customer apprehension surrounding acquired technologies.
Oracle has a very liberal definition of what constitutes middleware. Its Fusion Middleware product set comprises almost every piece of software the company owns other than its core database and business applications software. That includes an SOA suite, portal technology, process management, applications infrastructure and development, identity management, business intelligence, performance management, systems management and content management.
But the BEA acquisition will be mostly felt around the areas of SOA and applications infrastructure.
As part of its attempts to eliminate overlap and back the strongest product sets, Oracle has split its middleware products into three categories: strategic products; products that will ‘continue and converge’, with enhancements and a guarantee of nine years’ support; and products that will go into ‘maintenance only’ mode and be supported with patches (but no new feature) development for the next five years.
For many customers, the key is to understand where Oracle will be putting its strategic R&D weight – and where, to use the industry slang, it will be ‘feeding a dead man’.
In terms of application development tools, Oracle will continue with JDeveloper as its strategic product. But it is also lending the strategic label to a second category of product: the Oracle Enterprise Pack for Eclipse. That bundles Oracle’s existing plug-ins for the Eclipse open source development environment with BEA’s Workshop tool – also a set of Eclipse plug-ins. The pack is being made available as a free download.
In the core area of area of application servers, Oracle has again earmarked two products as strategic – one obviously so, the other less so.
It is backing BEA’s J2EE container, WebLogic. But, presumably under pressure from its largest users, it has also granted strategic status to Tuxedo, the 25-year-old online transaction processing monitor that BEA acquired from Novell in 1995, and where C++ and Cobol are more familiar target languages.
In contrast, the company has relegated Oracle Containers for Java EE (OC4J), the core J2EE runtime component of the Oracle Application Server, to continue and converge status. The greatest impact of that decision will be felt by its business applications customers.
OC4J is such an integral part of the Oracle E-Business Suite that any notion of carving out the Oracle Application Server and replacing it with WebLogic has been dismissed. Though Oracle is promising nine years development and support for that, many applications users will not be cheered by the thought that their core business software will be running on a product deemed non-strategic.
In the critical area of service-oriented architecture, the Oracle SOA Suite remains the primary portfolio, but it will be augmented with BEA technology. Most importantly, BEA’s AquaLogic, the enterprise service bus for WebLogic, will now be Oracle’s strategic ESB. And in the absence of a credible business process management suite of its own, AquaLogic BPM becomes the default tool for designing and orchestrating business processes.
In the area of SOA governance, Oracle is mixing the best from both company’s portfolios. For design governance, it has selected the AquaLogic Enterprise Repository for storing and managing SOA code; and for run-time governance, the products will include Oracle’s Web Services Manager, Service Registry and Management Pack.
Lastly, for user interface design and portals, Oracle’s WebCenter will become the company’s standard product, while BEA’s WebLogic Portal will be classed as continue and converge.
While not all users will find the integration formula palatable, the resolution of seven months of uncertainty will be welcomed. The sentiment at Oracle’s customer roadshows is also one of relief that many of the BEA tools are now part of a larger and ultimately more integrated portfolio.
According to Andrew Sutherland, vice president technology for Oracle EMEA, “The goal has been to offer the most comprehensive, integrated and modular middleware package.”
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