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Oracle pulls the trigger on BEA deal

Just when you thought Oracle might be settling down, the company makes a $6.6 billion bid for BEA Systems, the app server power.

Such a move has been rumored on and off for some time, but apparently it finally got the stamp of approval up on the eleventh floor in Redwood Shores.

Bloomberg others report that Oracle has contacted BEA’s board with a $17-a share offering—a 25-percent premium over BEA’s closing price of $13-and-change yesterday.

Financier Carl Icahn has upped his stake in BEA over the past few months and has been agitating for action.

Oracle and BEA share a Java-centric focus, but in the past few years Oracle has been building its own app-server business. Oracle CEO Larry Ellison used to boast of the progress his middleware was making at the expense of BEA share.

Several solution providers, some of whom support both Oracle and BEA wares have long speculated about whether or not the pairing would make sense.

This gives Oracle a very strong Java middleware share, said the CEO of one large system integrator who works with both companies and did not want to be named.

”BEA has been under pressure from Oracle, open-source, IBM for awhile and doesn’t have a diverse enough software portfolio to beat the other guys on every deal,” he said. Oracle has the complete solution—database, application server, tools but BEA has retained a better market presence in application servers, he noted.

He said his company tends to sell BEA and Oracle into different accounts. “It’s hard to sell a non Oracle app server into an Oracle account,” he noted.

Should the purchase go through, BEA will join PeopleSoft, JD Edwards, Siebel Systems, and a handful of other companies in Oracle’s portfolio. It also follows, by just a few days,  SAP’s announced plan to buy Business Objects, a business intelligence power. SAP and Oracle are the two largest providers of business applications.

Barbara Darrow, a Boston-area freelance journalist, can be reached at

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