Oracle & BEA: market impact

Gartner states that the growth in revenue (2008 compared to 2007) in the application infrastructure and middleware (AIM) software market is lower than the growth in 2007 compared to 2006. Please notice that, while in a recession, there is still growth, only single digit in stead of double digit. Fabrizio Biscotti gives two reasons for the loss of growth:

  1. The slowdown of the economy;
  2. The effects of the acquisition of BEA Systems.

Asheesh Raina elaborates on the latter: Oracle’s acquisition of BEA had a profound effect, especially in markets (like Asia-Pacific) were BEA historically was controlling a huge portion of the regional market. The process of combining BEA and Oracle, and the relative uncertainty surrounding the outcome, has driven potential or undecided customers to delay their purchases. Obviously it is typical that an acquisition of such magnitude has led to the typical uncertainty that always follows major merger & acquisition activities.

If the merger of Oracle and BEA has this impact on the market, what will the effect of the announced acquisition of Sun bring… Especially, if we are taking into account that not all uncertainty of the previous merger has been cleared. Yes, there is a strategic direction, and we think it is great. However, it has to be implemented in releases that we thought should be released by now. Oracle has history of keeping it´s cards to it´s chest with release dates and content of the releases. In this case, this unclear operational path adds to the uncertainty. Resulting in more undecided customers in the market.

It can be stated that the acquisition of Sun is smaller, and therefore will result in less impact. However in the case of Sun, there is less clarity on what exactly the benefits will be in the application infrastructure and middleware software market. Overall there remain lot of questions on synergy, and the future of products & technology unanswered. The time frame that is needed to answer the major part of these, will have influence on the total revenue in this software market, and the way Oracle’s market share is going.

Leave a Reply

Your email address will not be published. Required fields are marked *