By Matt Brown, Erica Driver, Mike Gilpin, Kyle McNabb, Rob Koplowitz, and Colin Teubner
We’ve been getting lots of questions about what the Oracle/BEA acquisition means in the Information Workplace platforms market. Here’s our take:
Oracle has made assurances to BEA customers
Oracle has assured us that they will be very mindful of protecting the interests of existing BEA customers, just as they have been for customers of Peoplesoft and Siebel – and we find their assurances credible. It’s not in Oracle’s interest to aggravate these customers, and in many cases BEA customers are already Oracle customers, anyway.
There are six main areas of synergy we’ve identified:
- Oracle and BEA have a lot of common customers, so there will be great channel efficiency to be had.
- High-end middleware
- Oracle benefits from BEA’s strengths in the telecom, brokerage, and government sectors
- BEA has some product footprint on Microsoft.NET, if Oracle should choose to exploit that capability.
- BEA is a leader in the growth of Information-as-a-Service (IaaS) solutions, and the combination with Oracle (which also has some strong and complementary capabilities there, due in part to its acquisition of Tangosol last year) has the opportunity to drive adoption and innovation in the IaaS area.
- Great partner-channel synergy – it will give Oracle more products to push through its large partner channel – a win-win for Oracle and its partners.
Yet with so many technology overlaps, something’s got to give
An Information Workplace platform delivers a core set of increasingly unified services that allows IT to roll out next-generation digital work environments that are seamless, contextual, individualized, visual, multimodal, social, and quick to create and modify. The core building blocks of an Information Workplace platform are content, collaboration and communication (including Social Computing tools), portal, and office productivity, as well as a new entrant: business intelligence for the masses.
Through its Business Interaction Division, BEA delivers portal, enterprise Social Computing, and BPM software products. The company has positioned this division as the corollary to IBM’s Lotus division.
- To date, BEA has not really promoted an Information Workplace vision and its portfolio is missing key IW platform building blocks like content and office productivity. It’s also missing secondary elements like business intelligence, learning, and information rights management, choosing instead to integrate with other vendors’ products in some of these areas — especially content and office productivity.
- As a result, when BEA is on the list of incumbent vendors in customers’ Information Workplace vendor evaluations, the vendor is usually not viewed as strategic. The effect: customers sometimes put plans in place to replace BEA’s portal and collaboration software with software from vendors they view as more strategically aligned.
- Oracle and BEA share customers at a company level. But the actual stakeholders who buy products from each are quite different and complementary. Plumtree had roughly 2,000 customers at the time of the acquisition by BEA. Many of these customers were, and still are, people interested in intranets, communities, collaboration, and document sharing. Witness the stories of Caterpillar Equipment, Halliburton, and others who used Plumtree to create extensive collaborative networks and communities. Conversely, Oracle’s portal 10g has been far more attractive to the composite applications, app dev, and business intelligence crowds.
- Some of the products in BEA’s portfolio (e.g., AquaLogic User Interaction Portal) may have staying power due to their existing installed base, but risk not being seen as strategic by Oracle or its customers. One possible outcome is that Oracle keeps and supports the AquaLogic User Interaction (ALUI) customer base as a way to get farther into the Information Workplace platforms market. Another possible outcome is that Oracle keeps some of BEA’s offerings but ends up selling them primarily into the Oracle customer base. In this latter case, the products in the current BEA portfolio will likely fade from view as Information Workplace platform options.
· Judging from the energy Oracle is putting behind WebCenter as a front-end to its Fusion applications strategy, Oracle WebCenter may be the ultimate winner in the portal and composite applications category (over the BEA products). Oracle already seems to be focusing most of its R&D investment in WebCenter over its existing Oracle Portal 10g product. Despite Oracle’s willingness to support it, WebLogic Portal will likely be the most severe casualty of this acquisition since Oracle will have a difficult time selling multiple portals for composite application delivery. BEA’s ALUI Portal product is another story, however. A repackaging and re-branding of the Plumtree portal product, ALUI Portal has an enormous market presence for corporate intranets and extranets that’s likely to be seen as attractive to an Oracle that’s been far more competitive in the apps business.
Collaboration and Social Computing
· We suspect that the AquaLogic Pages, Ensemble and Pathways products will be melded with Oracle WebCenter, which is Oracle’s focus for many Web 2.0 technologies. Oracle will likely absorb the best from the BEA stack and the best from WebCenter into future versions of the WebCenter offering.
· Likewise, the BEA AquaLogic Interaction Collaboration provides project-centric collaboration (shared tasks, calendars, events, announcements, documents), document sharing, wikis, blogs and situational applications. We suspect that this product may be supplanted by similar functionality Oracle provides (and plans to provide in future releases) in Oracle Collaboration Suite and also in WebCenter, which is tied tightly with the Fusion middleware strategy and is core to Oracle’s technology strategy.
Business process management
· Oracle’s stack has been designed to be as open as possible. The company will likely pick and choose the best parts of each company’s middleware stack to be part of Fusion middleware, and stop selling the rest while continuing to support it. Specifically in terms of AquaLogic BPM (formerly Fuego), Oracle might keep this product as a separate human-centric engine from its BPEL-based main process engine.
What the acquisition means for Oracle customers
- The acquisition provides Oracle and its customers with a much more credible set of application platform capabilities at the high end of the market. Forrester has seen dramatically increased levels of interest, starting last year and continuing into 2008, in middleware to enable high-end application workloads in the financial services, telecommunications, and government sectors – right where BEA already has a strong presence.
- It brings another set of important human resources into the Oracle fold. BEA has always been a powerhouse of strong engineering talent and innovation, and has recently continued that trend in the enterprise service bus (ESB) and Information-as-a-Service markets. Oracle and its customers will get much richer capabilities, and acceleration of Oracle’s ability to offer more capabilities in the future, as a result of this deal.
- It also brings to Oracle customers some useful technology assets like the JRockit JVM, support for real-time Java, a strong portfolio of Eclipse-based developer tools (and also tools for BPM and other complementary areas), and strong Information-as-a-Service technology (BEA’s AquaLogic Data Services Platform is a leader in the market).
- Oracle’s Service Delivery Platform is weaker and newer than BEA’s equivalent capabilities for telcos, and so telcos may conclude they should move to BEA’s product – which would bring some migration costs. Oracle certainly won’t force them down this road, though.
- Similarly, BEA’s Event Server appears stronger than Oracle’s equivalent capabilities. But it’s not as well established in the market, being very new, so Oracle could rebrand it and merge it into its own event-driven software stack. There is some risk of disruption to advanced customers working with this high-end technology, although those risks are likely small since both products (Oracle’s and BEA’s) are so new.
What the acquisition means for BEA customers
· In the short term, it is bit of a non-issue because Oracle does a remarkable job of supporting legacy acquisition technology.
- Cost pressures could mount from one of two sources: costs associated with migration from BEA to Oracle products, or the cost of Oracle’s “Lifetime Support” fees which may or may not be higher than what the customers have been paying to BEA for support.