Boy did second round negotiations happen under the radar screen on this one!
As I said back in October, Larry Ellison was NOT going to let this one go!
This morning according to the Wall Street Journal BEA accepted a bid from Oracle for $19.375. The area of middleware is HOT.
Oracle needs this acquisition to maintain an edge in middleware space.
The promise of SaaS and SOA in ERP architecture could revolutionize ERP as we know it.
Middleware will continue to be an area of intense focus in 2008 and in the specific areas of …
First, Business Intelligence…
On the supplier side, the fact that billions have been spent in the acquisition of Cognos, Hyperion and Business Objects by IBM, Oracle and SAP respectively should make it crystal clear the tier 1 sees the writing on the wall.
On the customer side, according to a recent discussion between Tony Friscia and John Hagerty of AMR Research, “getting more out of systems, getting better information for decision making is the number one strategic investment area for companies”. They further commented that this focus will remain regardless of where the economy goes … I would agree.
My organization is no different with strategic emphasis on BI. I think that it is safe to say that more companies have an ERP system than ever before… Now let’s make sense out of the data and make better decisions!
This one is not quite the, “Here it is 1,2,3” as Business Intelligence.
While on the supplier side, marketing alchemy is alive and well AND market consolidation is seriously underway.
The Oracle and BEA deal fell flat, but serious money was spent in this space by IBM acquiring WebFly, DataPower and Bowstreet, HP acquired Mercury, there are others …
There is no question that the investment dollars are there.
I just don’t yet see the value proposition materialize for the average ERP system customer. It sounds good, but have yet to see it materialize.
SAP, Oracle, IBM, HP, Infor
All is quiet for the moment, but 2008 looks to be a lively year in this space.
And Finally … ERP and Web 2.0 – A Parting Note
Talk about the ultimate oxymoron, the marriage however of the two could provide strategic advantage in many different ways. There are hosted ERP systems utilizing SaaS up and running now, so this is not vaporware.
Until next time…
Larry Ellison is no dummy and while I am not an expert on Mr. Ellison let alone his negotiating skills, I have been a negotiator for many years. I cannot think of a time when I opened with my high bid.
Well according to the Wall Street Journal today, BEA has now issued a counter proposal at $21 per share.
And later in the day Oracle quickly responded, stating the no one else is offering $17 per share so the offer remains at $17. Whoa, playin hardball …
Things are heating up. If you are a student of negotiation this one could get interesting. Both of these companies are hungry, but at this point, there appears to be a lot of ground to cover before an agreement will be reached.
Oracle has drawn a line in the sand of 8 p.m. PST this Sunday…
It appears as though it’s BEA’s move …. Any predictions?
The big boys have been in acquisition mode for a number of years and from what I can see it is not letting up.
Acquisitions have centered on critical business applications such as ERP systems, SCM, CRM and now Middleware. What the heck is Middleware anyway?
At its most basic level it’s the glue that brings the database and the application layers together. It’s about delivering and deploying information in the context necessary to make good decisions. It is business intelligence or BI (Last week SAP acquired Business Objects) that serves up information on dashboards. It’s content or document management where you can store and find information in any format imaginable. And finally it’s process management – just today, according to Computerworld , SAP announced that it will be acquiring Business Process Management firm, Yasu.
And of course, this conversation would not be complete without dropping in the current darling of the Middleware space – SOA or Service Oriented Architecture.
This architecture allows “Software capabilities [to] be connected to one another easily, enabling the efficient movement of information between applications,” according to the document, Introducing Infor Open SOA.
It is no small wonder that Larry Ellison has his sights set on BEA, because in my opinion, a properly implemented SOA could be the killer middleware component. You really should ckeck out Oracle’s list of Middleware components.
Specifically, if a software company could take SOA technology and integrate it into its family of applications, a customer could literally implement an ERP system ONCE and just add capabilities as the company grows without ever having to implement an ERP system again. I know it’s a crazy assertion, but that’s where I see it going…
So the acquisitions continue to happen, database, enterprise system and middleware applications are owned by fewer companies and these now bigger companies are offering products that appeal to a larger audience.
It’s not like ERP companies that once exclusively sold product to the Fortune 500 / 1000 companies have a choice…
The largest companies have been saturated with enterprise solutions for a while. So the Small and Mid-Market sectors will continue to be where the software providers gain market share.
I am not yet convinced that SAP, Oracle and other Tier 1 providers are where Small and Mid-Market business should spend ERP dollars. Organizational / user needs, implementation and consulting models are entirely different for a smaller enterprise than for a larger company.
This consolidation has been going on for a while. Let the market decide.
While our choices might become fewer as to the company we select, my hope is that overall software capability will continue to provide us with greater business agility.
Crystal Reports allows someone with a basic understanding of how a database is constructed to turn raw data into useful information fairly quickly.
Crystal Reports is the Microsoft Word of the reporting industry. While there are other word processors out there, Word owns 90+% of the word processing market. That’s about the same market share that Crystal has in the reporting space
According to the Wall Street Journal this acquisition is a move directed at small and mid-market business (SMBs) and because the emerging business intelligence market has good growth potential.
Personally from a technology standpoint, I think that this acquisition is a great move on SAP’s part. I guess if I had $6 billion dollars lying around I might have considered the purchase myself.
While this is a great move for SAP, I am not so sure it is for small mid-market business.
To begin with, Business Objects has been positioning Crystal for higher end ERP systems for the last 3 to 4 years.
The “data repository” for example, a Crystal feature that allows the user to store logic and reuse it, once could be utilized by someone with a stand alone license, but not anymore…Now features such as this require the purchase of a server license, as a result becomes more expensive and is more labor intensive to implement and administer.
In my opinion, the general direction of Crystal before the acquisition was toward the high end. With the acquisition … who knows what direction it will take?
Then there’s the issue of the scores of other ERP / Business Software publishers that have strategic partnerships with Business Objects.
Needless to say, SAP is not going to want to kill the goose that laid the golden egg, but let’s face it … SAP, Oracle, Infor and many others are all in direct competition…I just can’t imagine that this acquisition is going to somehow strengthen these partnerships.
Finally, if there is one thing that SAP does not understand, it is small and mid-market business. Again, I just don’t see how this acquisition is going to help anything other than larger companies.
There are other reporting tools out there and I suspect that this acquisition will create a vacuum and build momentum for the competition. This might be prime time for another reporting and/or business intelligence provider to take the top dog seat in the mid market.
Time will tell…