Other companies may have been acquisitive, but Oracle has been
the most aggressive of all in recent years, with its PeopleSoft and
Siebel acquisitions, and the purchase of BEA. The latter helped to
strongly cement its
middleware strategy.
BEA was a good fit for Oracle because it was at or near the head
of the middleware market. Before the BEA acquisition, a lot of
Oracle's middleware portfolio was home-grown (as SAP's was). Oracle
had already ticked most of the middleware boxes with its own
technology, but much of it was mediocre, Neil Ward-Dutton says. It
rolled out its own Java application server, for example. "But that
was historically seen as a poor product," says Neil Ward-Dutton.
"It engineered it along the way, but there was not a lot of market
penetration, and it had an image issue."
BEA replaced those technologies with more sophisticated
versions. It had a big customer base for its Tuxedo software in
China, which helped open that area up to Oracle. It was also a big
player in the telecommunications space.
Although the BEA acquisition happened at the start of 2008,
Oracle redefined its middleware strategy three years ago, according
to Andrew Sutherland, vice-president of Fusion middleware at the
database supplier. It wanted to make it as comprehensive as
possible, so that customers could approach Oracle for middleware at
any layer of the stack, from application servers up to business
process management (BPM) and content management.
"That sounds like a bit of a no-brainer now, but it was not four
or five years ago," he says.
It also aimed to integrate all of the parts of the stack so that
they worked together and provided visibility across the whole
range. And finally, it wanted to be open (as other suppliers such
as SAP and IBM have tried to be, to varying degrees).
Now, the firm's middleware architecture consists of multiple
layers. At the bottom lies grid infrastructure. Atop that sits the
application server layer, service oriented architecture (SOA) and
process management (containing the SOA Suite, Governance and BPM
Suite), content management (Enterprise Content Management Suite),
business intelligence (BI Suite EE Plus and the Data Integration
Suite), enterprise performance management, and user interaction
layers, in that order. The user interaction layer uses the
WebCenter Suite and WebCenter Services product lines.
At the bottom of the stack, the focus is on performance.
Oracle's WebLogic Application Grid covers that, but it also uses
BEA's JRockit Java Virtual Machine, along with in-memory caching
technology that it acquired along with Tangersol in March 2007.
It uses BEA's Weblogic application server at the second layer,
demonstrating its commitment to migrating customers away from its
older products. "Our policy is to continue support for the older
products and to develop them, and with each successive release we
make it closer to the strategic product," says Sutherland.
At the SOA layer, it acquired the Aqualogic product line,
including a service bus marketed under that banner. It will take
that technology and merge it with its existing service bus to
create a new product. "One major change to the Aqualogic bus is to
let it run in many different environments," Sutherland adds. And on
the content management side, the company is using technology from
Stellent, which it acquired in 2006.
Ward-Dutton worries that the BEA acquisition may lead to
unwanted side-effects. Oracle's strategy is so aggressive, and it
is so strongly associated with database and application software
that it risks alienating some of BEA's customers, he warns. "There
were a lot of companies that bought BEA because they wanted
Switzerland - they wanted someone independent," he says. "When it
was purchased by Oracle, that put a spanner in the works. It tipped
the balance a bit, and perhaps makes people think 'I should look
elsewhere'".
That is a cultural issue that Oracle may have to face, but in a
short amount of time, the company has taken some solid steps to
integrate BEA's product set into its own from a technical
perspective. What seemed like little more than an adequate set of
middleware offerings is becoming much more world class.
Timeline
2000: Launches a rebuilt application server, Oracle 9i Application
Server.
2002: Launches Oracle Collaboration Suite.
2003: Introduces Oracle Database 10G, focusing on grid
computing.
2004: Launches BPEL Process Manager.
2006: Buys Stellent for $440m, bolstering its content management
tier.
2008: Buys BEA for $8.5bn
Customer references
The City of Las Vegas took a gamble on Oracle BPEL Process
Manager to tie together applications and business processes. It
streamlined its water pollution control facility, along with land
management, using the product.
UK supermarket group Morrisons is using Oracle's SOA Suite and
Identity Management platforms as part of a wider system to manage
its retail operations. Announced in February 2008, the deal will
see the firm install the systems (which also include Oracle's
database and Ebusiness Suite) over the next five years after
Morrisons turned its back on in-house development.
Neil Ward-Dutton on Oracle strengths and weaknesses:
Strengths:
The BEA acquisition does not broaden Oracle's middleware
portfolio much, but improves its quality significantly. It is now a
very strong technology proposition indeed.
Oracle has so far succeeded in integrating BEA's technology and
products on schedule.
Weaknesses:
Oracle needs to continue to work to convince people that it can
be a leading middleware provider independently of its application
supplier position/ambition.