Oracle buys its way into middleware market

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...

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.

Read more on Integration software and middleware

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