Oracle's $6.7 Billion Bid for BEA Turned Down 61
andy1307 writes to tell us that according to the Mercury News, Oracle has made an unsolicited bid to buy BEA Systems for about $6.7 billion. BEA confirmed that it rejected the $17 a share bid as too low. "BEA told Phillips that its board of directors believes BEA 'is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter.' Oracle's aggressive bid may be an attempt to pre-empt an acquisition by others, Finley said. Those named in the past as potential suitors include IBM, the German software company SAP AG and Hewlett-Packard. Trip Chowdhry of Global Equity Research said he expects a counterbid from SAP, which he said needs BEA to survive. 'If they don't get BEA, probably in two years SAP will be on the block to sell itself,' Chowdhry predicted. Oracle needs to keep BEA out of competitors' hands, he said. Chowdhry said the offer currently 'is not right. Probably at $21 the deal will get done.'"
They should have taken it (Score:5, Interesting)
Why? (Score:4, Interesting)
No-brainer (Score:4, Interesting)
Re:They should have taken it (Score:0, Interesting)
BEA better take it while they can... (Score:2, Interesting)
When Larry snagged PeopleSoft, they hurt BEA very badly - there are lots of PeopleSoft instances out there running under Weblogic, and if everyone else is like us, there is also a project in the queue to dump BEA and switch to the Oracle App Server on the next upgrade. Heck, why not? Why would I bother keeping a 3rd party app server in the mix when my ERP & DBMS are both Oracle, and Oracle can offer me OAS as part of a packaged deal? Combine that with the trend that intranet/extranet portal servers (like Plumtree/Aqualogic) are dead - either replaced by good web development/CMS or open source-based platforms - and IMHO BEA is in very deep dog doo.
Maybe their secret plan is to resurrect CORBA...
Re:BEA better take it while they can... (Score:3, Interesting)
I once talked to some BEA execs at the BEA offices as a member of the trade press, maybe around 2001. The BEA folks in the room told me (paraphrasing) that they didn't really care about press publicity, because there were literally only about six CEOs in the country whom they were interested in reaching. The others were basically not worthy. Seriously -- they said this.
A BEA employee's perspective (Score:5, Interesting)
Basically, BEA wants to stay indepdenent, because it lets us do interesting things if we keep shareholders happy. And, by and large, we had been doing just that for the past 3 years, until licenses started to fall earlier this year. Wall Street forces a quarter by quarter mentality that's very hard to meet in a midsized company, in my opinion, given that the nature of "infrastructure software" involves longer sales cycles than when the dot-com bubble kept the "J2EE app server" purchase orders flowing in.
For those that suggest BEA's WebLogic is somehow commoditized and is the source of all of our woes, please understand a few things:
- BEA sells a *lot* more than an app server. Both Tuxedo and WebLogic Server have not been a sales focus for years at BEA, at least in North America -- Tux is still growing in Asia. The core products are still a cash cow, so we invest most of our R&D into it, but it doesn't account for the growth we've had since 2002. Most of that has been from Portal, Integration, and the new AquaLogic stuff.
- BEA contributes a lot to Java open source -- it's on the Eclipse board, it runs two Apache projects, is a major contributer and partner with Interface21 (the Spring guys), etc.
- Open source has never been BEA's biggest competitor. IBM and Oracle are. Really. The reason is that a major portion of BEA's sales focus is on enterprise license deals in the $million$ range. In the smaller deals, that's more likely where you see
- BEA's *new* license growth had fallen recently, but maintenance and overall revenue continues to rise. That means that, the *rate* in which our middleware is being acquired is slowing for us as of late, not that people have somehow stopped buying our stuff. So, yep, we could be doing a better job improving & selling what we have with AquaLogic and WebLogic, but it's not doom and gloom times here. Maybe it will be better under another company, I donno. Part of the problem is that pure "middleware" in general is a hard sell, as companies like TIBCO are also feeling right now -- SOA was the latest trend, with some reasonable enthusiasm and growth associated with it, but the real fortune was made in the peak of the dot-com boom, and it's hard to replicate that sort of hype. Oracle sells middleware along side applications, databases, security suites, etc., so it's not quite as hard to sell the business on the benefits.
- I have no idea what the article is talking about with regards to SAP. I think NetWeaver is a crap pile, but that doesn't mean they're dead if they don't buy us. They could go open source, or improve it.... People stick with SAP because they're locked in, not because NetWeaver is supposed to be better.
- Even if this deal doesn't go through, BEA is viable enough to stay independent. It has over $1B in the bank, it generates high free cash flow, and if we could get this stock options review over & done with, we could actually have some good information for the Street to price us properly. The question really is about the stock price -- whether the shareholders think we can raise it on our own, or someone else can do a better job of it.
Anyway, I've been pretty happy with the company for the past 3 years. Regardless of what happens, it's exciting times.
An integration architect's perspective (Score:3, Interesting)
Typically, customers look for business solutions. They look for standardized packages for their business domain. This is were SAP is getting stronger. (BTW, we had to tell SAP that we did not need middleware from their side...)
The whole SOA trend goes in this direction. To stop thinking about integration as technical plumbing but as connections with a business meaning. This is an arena where BEA has not a lot to offer. Their expertise is in plumbing (although they are very good at doing this).