What does Oracle's BEA acquisition mean to customers? 17 January, 2008 By Patricia Pickett

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In a conference call announcing the acquisition, Oracle CEO Larry Ellison said one of the things that made BEA an attractive acquisition target was that its product lines and vertical solutions were "overwhelmingly complementary to our Fusion middleware products."

There are several areas where Oracle and BEA have little overlap, such as in the transaction monitoring and Java virtual machine spaces, where Oracle doesn't have anything, or in the business process monitoring and identity management areas, where BEA lacks a product, Wang said. The only areas in which Oracle and BEA were competing head-on were with application servers, portal servers, enterprise service bus and BPM layers.

Oracle could expect a fight from other vendors -- but the competition seems to be off guard for now. The potential acquisition "takes away the last remaining independent major middleware platform provider, leaving future competitors without a large install base and a third-party supplier," said Ray Wang, principal analyst at Forrester Research in Cambridge, Mass. Other vendors, such as SAP, IBM and HP, could gain more from acquiring BEA than Oracle will, he said.

System integrators (SIs) that bet their future on BEA's middleware platform -- especially the bigger ones like Accenture, Deloitte and Cap Gemini -- would find that they are now back in the Oracle fold, said Wang.

Oracle is promising to continue supporting BEA's products through its Apps Unlimited effort, in much the same way that it has supported products from other acquisitions, such as PeopleSoft, J. D. Edwards and Siebel, Ellison said. "Oracle Fusion middleware will continue to be the centre of our current and future middleware application technologies," but Weblogic and other BEA offerings will be an "increasingly important part of our offering going forward."

Customers can choose to continue using existing BEA products, in which case they will be "supported with more R&D and with a qualitatively higher level of support around the world," or they can opt to move to Fusion, "as it continues to evolve and incorporate the best features of both companies' products," he said. "Either way, it's the customer's choice."

In some ways, the acquisition could present a more certain future for BEA users, Shiau noted. "BEA was facing questions about how much product development it could sustain in the face of the big margin pressure it was under." With BEA under its wing, it'll be in Oracle's best interests to keep up product development to maintain BEA's market position, and Oracle will likely have the development funds to do so, which BEA might not have had, he said.

However, Wang said many BEA customers would find they have to stick to the technology they've been using, "mostly because of the high-end custom development they've built on BEA." These customers are advised to seek clarification from Oracle about BEA's future roadmap and to lock in maintenance agreements before the acquisition closes, if they're paying less than 22 per cent maintenance (which is what Oracle charges). They also shouldn't be surprised if Oracle acquires more vendors that have built their applications on the BEA platform, he said.

Meanwhile, Oracle customers should seek clarification on the attributes within BEA that could become common across Oracle apps, and should expect BEA to play a critical role in creating a smoother transition as Oracle makes more acquisitions, Wang said. Oracle customers should also consider consolidating middleware strategies. "Long-term costs could be lowered through the reduction of redundant licenses."