Would BEA disappear under Oracle?

BEA customers will probably have little to worry about, analysts say

Oracle’s bid to purchase BEA Systems would eliminate a direct competitor, but analysts say BEA customers probably don’t have to worry about Oracle dropping BEA’s successful product line.

Oracle’s unsolicited bid to purchase BEA Systems would eliminate a direct competitor in the market, but analysts say BEA customers probably wouldn’t have to worry about Oracle dropping BEA’s successful product line.

Oracle’s bid to purchase BEA is by no means close to being a done deal though. Late today BEA’s board has already said the offer is too low, according to reports in MarketWatch and the Dow Jones Newswires. Oracle has offered to buy BEA Systems for about $6.7 billion.

“In the case of Oracle and BEA, it’s like where do they not compete?” says James Kobielus, principal analyst for data management at Current Analysis. “They would be eliminating a direct competitor in all manner of things SOA.”

BEA is acquired, its customers will naturally ask “is there a future for us?” Kobielus says. They might be concerned Oracle will absorb BEA technology into its current offerings, or not offer the same level of support and upgrades they’ve received from BEA.

But Kobielus thinks Oracle is unlikely to drop a large and well-established brand like BEA’s. After all, Oracle’s goal is to make money, and angering BEA customers won’t help them do that. Oracle might keep the BEA name on the products for the foreseeable future, just as IBM has done with Lotus, Kobielus says.

Still, Kobielus expects a lot of “cross-fertilization” between Oracle and BEA products.

“They’re going to cherry-pick the best technology going forward from BEA’s product portfolio,” he says. “That’s going to be a long-running process.”

Oracle said it intends to protect the investment customers have made in BEA’s products with support “for years to come.”

“It's not in Oracle's interest to get customers to defect,” writes Laurent Lachal, a senior analyst at Ovum. “It can point to its record with PeopleSoft, where after a very contentious take-over that many customers opposed, Oracle has managed to hold onto and even in some cases enhance the user base for PeopleSoft products. Obviously, bringing the offer into the open does put a lot of pressure on BEA's board. We'll have to wait and see what their reaction will be.”

BEA’s product lines include AquaLogic, software to help develop and manage SOA components, and other products to integrate, secure and govern the services deployed in an SOA. BEA also makes the WebLogic platform, a set of products including a portal that supports Web 2.0 technologies with rich user interfaces and mashups.

If Oracle does buy BEA, it would be the vendor’s 10th acquisition  in 2007. Oracle’s rival SAP agreed to buy business intelligence vendor Business Objects for $6.78 billion earlier this week, but Kobielus says he doesn’t see any connections between the Business Objects deal and Oracle’s potential BEA purchase.

“Business Objects is purely business intelligence and performance management, data quality, and data integration, and BEA has very little of that. They have no [business intelligence] to speak of,” Kobielus says.

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