Friday | 22 August, 2008
Computerworld
BEA, Oracle product overlaps pondered
If it does buy BEA, Oracle would have to deal with product overlap in the application server and middleware spaces.
Paul Krill (InfoWorld) 15/10/2007 08:13:27

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Early reaction to < Oracle's proposal to buy BEA Systems has observers acknowledging Oracle would have to deal with product overlap in the application server and middleware spaces.

The two companies have been fierce competitors particularly in the application server arena. A merger would give Oracle two application server lines as well as BEA's customer base.

"I would imagine Oracle buying [BEA] for the customers and the engineers and not just for the product," said Ashish Jain, president of the Denver BEA User's Group and a former BEA official.

He expressed disappointment and doubts about the proposal.

"When I was at BEA, we were told very specifically that we would never let this happen," Jain said.

"I think it's a sad thing to happen because BEA used to be the company that would invent and drive the way," Jain said. "By Oracle acquiring, that would be the end of that."

Burc Oral, a BEA user and president of the New England BEA Users Group, asked how Oracle would integrate the BEA product stack. "Oracle has a very similar product stack," he said. "I'm not so sure how BEA's going to fit into Oracle's stack."

Oral uses the BEA WebLogic Server application server for developing Java-based ecommerce applications.

BEA still has a lead over Oracle in application servers, said Oral. "The product roadmap is going to be quite murky," he said. HP or CA might be better fits as suitors for BEA, Oral said.

"I always considered Oracle as a very good database company," said Oral. It would be great if Oracle replaces its other products with BEA's software, he said.

Products overlapping for the two companies include such offerings as the BEA WebLogic Server, matched by the Oracle Application Server; BEA WebLogic Portal, and Oracle Portal, for portals, and the BEA AquaLogic Service Bus and Oracle Enterprise Service Bus in the ESB space. Both companies also offer Java development platforms with BEA's WebLogic Workshop countered by Oracle JDeveloper.

The two vendors participate in the Eclipse Foundation for open-source tooling, which would be more of a match than an overlap.

While recognizing overlap, analyst Laurent Lachal of Ovum did not think this would be a big problem. Both companies use J2EE, he noted.

"The overlap is a problem but I don't think that it's that big of a problem," he said.

"The key thing is to get business people and technology people together to come up with a set of messages that clarify how the integration is going to be handled," Lachal said. Like what has happened with its PeopleSoft acquisition, Oracle would move customers over at their own pace, said Lachal.

While Oracle has offered US$17 per share, a price called too low by BEA, Lachal suggested a price tag of US$20 per share.

BEA, Jain said, has never been able to transition from a mid-size vendor to a large company. In the fiscal year that ended January 31, revenues were US$1.4 billion, an increase of 17 percent from the previous year.

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