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Oracle's $6.7 Billion Bid for BEA Turned Down

ScuttleMonkey posted about 7 years ago | from the not-rich-enough dept.

Businesses 61

andy1307 writes to tell us that according to the Mercury News, Oracle has made an unsolicited bid to buy BEA Systems for about $6.7 billion. BEA confirmed that it rejected the $17 a share bid as too low. "BEA told Phillips that its board of directors believes BEA 'is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter.' Oracle's aggressive bid may be an attempt to pre-empt an acquisition by others, Finley said. Those named in the past as potential suitors include IBM, the German software company SAP AG and Hewlett-Packard. Trip Chowdhry of Global Equity Research said he expects a counterbid from SAP, which he said needs BEA to survive. 'If they don't get BEA, probably in two years SAP will be on the block to sell itself,' Chowdhry predicted. Oracle needs to keep BEA out of competitors' hands, he said. Chowdhry said the offer currently 'is not right. Probably at $21 the deal will get done.'"

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bubble? (-1, Offtopic)

Anonymous Coward | about 7 years ago | (#20961823)

did someone say stock market go boom?

Linus is right (-1, Offtopic)

Anonymous Coward | about 7 years ago | (#20961827)

I am with Linus on this one. For the life of me I can't understand what this sucking up to RMS is about. Linus himself does not think GPLv3 is a good thing. So why do people keep adopting it.
Without Linus FOSS is tossed. Not following Linus is dangerous for the survival of FOSS.

Bea Arthur = Win (2, Funny)

User 956 (568564) | about 7 years ago | (#20961829)

BEA told Phillips that its board of directors believes BEA 'is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter.'

I agree. I mean, Bea was a total powerhouse in Golden Girls.

Misparsed... (4, Funny)

meringuoid (568297) | about 7 years ago | (#20961951)

... I thought for a moment that said 'BAE Systems'.

Oracle buy one of the world's major munitions manufacturers... well, do you want to argue about which is the best database with people who manufacture JSFs and Typhoons? No? Me neither...

Re:Misparsed... (1)

modecx (130548) | about 7 years ago | (#20962779)

Hell, that's not the worst of it! They also make nuclear submarines (and indirectly) French nuclear tipped missiles, and (far more worse than the above) what used to be the world's single largest machine (by occupied square footage)--the former Denver International Airport Baggage System (which incidentally is now ran by Siemens, which officially make it only slightly less evil than Wal-Mart, which itself is only slightly less evil than NAMBLA.)

Who is BEA? (1)

pavium (557126) | about 7 years ago | (#20961989)

And the Mercury article didn't mention who BEA is, either.

Presumably, if we all lived in San Jose, we'd know too.

They should have taken it (4, Interesting)

Thaelon (250687) | about 7 years ago | (#20962021)

I work with BEA products, namely Weblogic and JRockit. Neither impress me. Weblogic is constantly failing to hand out connections (which is it's primary job) and the stack traces JRockit produces are formatted differently from those of Sun's JVM (which prevents my IDE from turning them into clickable hotlinks that take me to the lines of offending code). FSM knows why they made them different. Oh and the line numbers in your stack trace will be wrong unless you turn off optimization - which is the the whole point of using JRockit. (It's supposed to be faster than Sun's JVM - I've never seen proof).

Re:They should have taken it (2, Interesting)

glitch23 (557124) | about 7 years ago | (#20962475)

I actually like Weblogic over JBoss. The last time I used JBoss it didn't have a nice console GUI like Weblogic does. Therefore I could manage WL easier and I was more efficient at it than with JBoss. I eventually would just edit the XML files for Weblogic by hand for some things. As for Tuxedo, that's a load of crap. They are both overpriced I think but at least Weblogic is almost worth it. The problem with all their apps though is that they are bloated. I installed their ESB product (AquaLogic) along with Weblogic which meant I had multiple JVMs running and over a gigabyte (maybe 2GB, it's been a while since I setup the sandbox) of RAM being used. I didn't even have any custom apps deployed (just samples).

Re:They should have taken it (1)

alext (29323) | about 7 years ago | (#20963247)

Classic! One more "insightful" I think, no?

Re:They should have taken it (1)

scambaiter (703904) | about 7 years ago | (#20964357)

Taking a look at Oracles current strategic focus, id say they rather go for Aqualogic than Weblogic. It took its time but today OAS/OC4J is doing its job quite well - still not the best AS out there, but not as crappy as it used to be. As well the current JVM are fast enough for not needing JRockit.

Oracle got a neat offering for implementing SOA, but some parts still need some serious improvement. Its basically missing some aspects of the top layers in a SOA, like proper support for BPM (no, ARIS wont work out...) and SOA governance. So i guess thats what they are really after when bidding for BEA.

Re:They should have taken it (2, Informative)

Walles (99143) | about 7 years ago | (#20965403)

Full disclosure: I work for BEA.

the stack traces JRockit produces are formatted differently from those of Sun's JVM (which prevents my IDE from turning them into clickable hotlinks that take me to the lines of offending code). FSM knows why they made them different.

Since about two years back our stack traces look identical to SUN's. I'm at home right now and can't give you a specific release for that change. The difference was that old versions of JRockit used to show full method signatures rather than just method names in stack traces. We reverted to doing what SUN's doing because of people having the exact issues you're having. Which JRockit version (do java -version) are you using?

Oh and the line numbers in your stack trace will be wrong unless you turn off optimization - which is the the whole point of using JRockit.

If you have a repro for this, please post it here [bea.com] . Since you're running WLS you probably have a support contract for JRockit, in which case you should open a support case. Unless we know about the problem we cannot fix it :-(.

(It's supposed to be faster than Sun's JVM - I've never seen proof).

As always it's not provable for the general case as it depends on what you're doing. Two references that do have numbers for JRockit being generally faster than SUN's JVM are here [bea.com] and here [stefankrause.net] , but those numbers may or may not be applicable to your app.

HTH, have fun :-).

Why? (4, Interesting)

ebonum (830686) | about 7 years ago | (#20962027)

Perhaps I'm missing something. Can someone explain the great value in BEA? Why does SAP need this to survive? Does this guy own a million shares in BEAS or does he know something I don't. My knowledge in this space is a little weak. I do know that my company ( I shouldn't say who, but our market cap is a lot higher than BEAS ) very happily dumped Weblogic for jBoss. The transition went remarkably smoothly ( Disclaimer: We did have a jBoss god on staff ), and it saves us A LOT of money. We use it for hosting some very large, complicated, financial applications. Based on what I have seen, BEA sells a product that has become a commodity. It should no longer command a premium.

Re:Why? (3, Insightful)

the eric conspiracy (20178) | about 7 years ago | (#20962117)

If you are selling enterprise products for a million dollars a pop that are based on J2EE technologies there are a lot of companies out there that don't want to hear that they are getting something based on FOSS.

This is the space Oracle plays in. By buying BEA they get a bunch more of this kind of customer.

To them you can bet it is worth 6.7 billion.

Re:Why? (0)

Anonymous Coward | about 7 years ago | (#20962597)

Most companies know, just because it's FOSS, doesn't mean it's gonna adapt itself to their hardware or be easy to handle.

Anyway, BEA is going to HP or Xerox, but if the FTC ask you didn't heard it from me.

Step 2 is the clever bit (1)

edittard (805475) | about 7 years ago | (#20964165)

there are a lot of companies out there that don't want to hear that they are getting something based on FOSS.
1) Give them something based o FOSS.
2) Don't tell them. <=== clever bit!
3) ????
4) Profit!!!!!

Re:Why? (1)

ebonum (830686) | about 7 years ago | (#20965167)

I understand your point. I hear this a lot, but it is not what we have experienced. The products is well north of a million a year, and I never heard a word about FOSS concerns from any of our clients. They did have some very intense security questionnaires and audits ( I have learned to hate SOX consultants with a very deeply set passion ), but it was equally difficult to get passed them on jBoss as it was with Weblogic. Granted, I'm only looking at a slice of less than 20 major financial institutions.

I still think BEA is massively overrated and should consider themselves blessed to get the billion dollar buyout.

http://finance.yahoo.com/q/cf?s=BEAS [yahoo.com]

http://finance.yahoo.com/q/bc?s=BEAS&t=5y&l=off&z=l&q=l&c= [yahoo.com]

I think the markets price stocks well when you look over a multi-year horizon, and this is a very high premium over the last 5 years history. If there really was value there, the stock's history should show it.

They really should shut up and take their billion dollar early x-mas gift while they can.

Re:Why? (1)

Stu Charlton (1311) | about 7 years ago | (#20965509)

SOX audits have everything to do with your internal practices & logic -- the underlying infrastructure isn't going to be the determining factor.

There are two splits in your graphs, so the current price makes the shares worth a lot more than they were in the late 90's.

Regarding the multi-year horizon, let's compare BEAS to its competitors over the last 5 years [yahoo.com] ... the value is clearly there.

As for shutting up & taking the money... the board is doing *exactly* what it's paid to do, which is get the best value for its shareholders. The open market has already pushed BEAS stock above $18, so clearly many think that $17 is too low.

Re:Why? (1)

Meowfaceman (637882) | about 7 years ago | (#20967147)

This is correct. PeopleSoft, which Oracle owns, makes heavy use of both WebLogic and Tuxedo. Oracle's trying to provide their own replacement options, but BEA products are more tried and true than Oracle's stuff yet. PeopleSoft is a multi-million dollar business for the software alone, not to mention actually setting it up and customizing it.

Re:Why? (0)

Anonymous Coward | about 7 years ago | (#20962643)

SAP should buy Red Hat so They will have a good enterprise Linux distro plus JBoss.

Re:Why? (0)

Anonymous Coward | about 7 years ago | (#20963615)

Have you ever *used* NetWeaver???

Re:Why? (1)

wondergeek (220755) | about 7 years ago | (#20979137)

Have you ever *used* NetWeaver???
Unfortunatly, yes...

Re:Why? (0)

Anonymous Coward | about 7 years ago | (#20964215)

With a name like Chowdhry, he's probably Indian. Nuff said.

Re:Why? (1)

Kalriath (849904) | about 7 years ago | (#20964257)

Personally, I'd take "SAP needs BEA to survive" with a grain of salt. SAP just bought Business Objects, which is widely used, and I don't see them going away anytime soon.

Re:Why? (1)

MoogMan (442253) | about 7 years ago | (#20964895)

Large companies are very quickly picking up speed and moving towards SOA [wikipedia.org] . Oracle is going to be left behind (read: incompatible, out of the market) if it doesn't catch up. BEA has an application server as well as an integrated JSR116 compatible SIP [wikipedia.org] stack, so it seems to make sense to buy them and get behind them to push into the SOA market.

Also, it makes sense to take them before anyone else does, so they can integrate BEA WebLogic into it's application server and therefore lock other companies out of gaining an "easy" application server.

Another notable acquisition is Avaya [avaya.com] 's acquisition of a SIP server company called Ubiquity [ubiquitysoftware.com] . This happened some time last year, so maybe Oracle have been watching the market and decided they have to play catch up.

My thoughts, are that everyone wants to take a piece out of the real time communications market, and taking WebLogic with it's SIP stack makes sense.

RedHat really have the potential to capitalise on this market, if they were interested - they own JBoss, and Tuscany [slashdot.org] seems to becoming a pretty good SOA project.

Re:Why? (0, Troll)

rmerry72 (934528) | about 7 years ago | (#20976905)

My knowledge in this space is a little weak.

No need to state this explicitly. The rest of us can tell your knowledge of Weblogic and J2EE is inaccurate insignificant based on your comments alone. Hell, if you can spell "Java" I bet your mother is proud.

Oracle will buy BEA (1)

cryfreedomlove (929828) | about 7 years ago | (#20962037)

The deal will happen. If BEA wanted to stay independent they would have just said they were not selling. The fact that they said the offer was too low is negotiation.

What happens to Oracle's OAS team and product if this happens? OAS has been soundly whipped by BEA in the marketplace and they are basically both the same thing.

Re:Oracle will buy BEA (1)

Mr. Underbridge (666784) | about 7 years ago | (#20962339)

What's the old quote? We've already established you're a whore, now we're just haggling on price.

Re:Oracle will buy BEA (1)

einar2 (784078) | about 7 years ago | (#20964759)

My bet is that OAS will disappear.
OAS has not really any market penetration and ISVs typically support WSA or WLS. The new think for WLS would be that Oracle can "force" customers to adopt it. Most customers use Oracle DBs anyway and the WLS app server could become a necessary part of it. Oracle already tried this with OAS, just that it did work due to the lacking ISV support. IBM uses a similar schema with WSA.

Re:Oracle will buy BEA (1)

Angostura (703910) | about 7 years ago | (#20966169)

A Deal will happen, but there is nothing to say that Oracle will be the eventual purchaser.

No-brainer (4, Interesting)

dustisearth (1170113) | about 7 years ago | (#20962055)

When the stock jumps well beyond the proposed acquisition price (to $18.82), that's a solid indication that the offer isn't going to cut it. One would normally expect a jump in price upon the announcement of a buyout offer at a premium, but typically the price will jump to some intermediate value between the previous market price and the offer price, in effect discounting for the chance that the deal will fall apart. Here the market response went well beyond that. Now the question is, will we see a bidding war? And with whom?

SAP needs to buy BEA to survive? (1)

JonathanR (852748) | about 7 years ago | (#20962097)

Trip Chowdhry of Global Equity Research said he expects a counterbid from SAP, which he said needs BEA to survive. 'If they don't get BEA, probably in two years SAP will be on the block to sell itself,
So if Oracle buys BEA, does that set the scene for Oracle/BEA to buy SAP in two year's time?

Does this mean companies need to become an international monopoly in order to survive? My mind boggles at all the corporate takeovers, M&As etc.

Re:SAP needs to buy BEA to survive? (0)

Anonymous Coward | about 7 years ago | (#20962217)

I did not want to say anything at first, but after reading and and rereading it (not the TFA of course) here is what I must say -- This Trip Chowdhry must be a moron. SAP ought to buy BEA or sell itself? Why? The only reason I can think of is because Trip Chowdhry is a moron.

Re:SAP needs to buy BEA to survive? (0)

Anonymous Coward | about 7 years ago | (#20964443)

What he really said was:

Budbud mbud BEA budbud bud wery SAP bud budbud bud budbud
They just took a guess at what he meant.

Re:SAP needs to buy BEA to survive? (1)

Sweetshark (696449) | about 7 years ago | (#20962697)

So if Oracle buys BEA, does that set the scene for Oracle/BEA to buy SAP in two year's time? Does this mean companies need to become an international monopoly in order to survive?
Because something that was a mere buzzword for a long time finally shows some effect on the market: SOA.
There are basically three big companies that started marketing SOA and laying the foundation with some standards: Microsoft, IBM and BEA. And they had good reasons for that. Currently "enterprise software" is graced with vendor-lockins that make Microsoft look like innocent angels.
To do anything with SAP you need a SAP consultant that will milk you until you are dry like dust. Same for ECM systems. SOA might change that, because it allows systems like Sharepoint/Windows Workflow enter the market or allows the migration away from "heritage" applications.
So anything that isnt as huge as IBM or Microsoft (or maybe Google) are crushed between the offerings of those giant (the solutions of the huge companies have two big advantages: integration and network effects) and upcoming open source solutions like jBoss, Compiere and Alfresco. All this while their old vendor-lockin vanishes.
So yes, most company need to become part of an international monopoly to survive. Or go open source - but that would require to do a lot of restructuring in companies with a market cap bigger that 1B USD (hell, it took Sun seven years).

IANAL, YMMV and all that jazz.

It was reported as a done deal (2, Insightful)

DreadfulGrape (398188) | about 7 years ago | (#20962443)

Wow, did the business press ever jump the gun on this one. The headline in the Wall St. Journal this morning was "Oracle Buys BEA".

Re:It was reported as a done deal (1)

MrCrassic (994046) | about 7 years ago | (#20962917)

I noticed this too, but it did seem as if the deal would be solid.

I really don't know much about BEA outside of its Wikipedia entry, but I'm sure that since their solutions are database oriented (correct me if I'm wrong, please), having (what I would suppose would be) full access to Oracle's codebase is extremely advantageous.

With the way Oracle has been performing lately on the stock market, I'm sure BEA will regret not having taken this offer. If anything, their rejection may actually harm them in the long run as investors may seem them as missing the mark...

Just pure speculation here...

Re:It was reported as a done deal (0)

Stu Charlton (1311) | about 7 years ago | (#20965667)

Carl Icahn owns something like 15% of the company now, and is BEA's largest shareholder. He wants a sale. He just needs to convince more investors of this (80% are BEA's ownership is institutional, like mutual funds or private equity , hedge funds, etc).

BEA will get a better price... it's how the game is played. And if it somehow remains independent, it slaps egg on Larry's face.

BEA's stuff (like any business infrastructure) relies databases a lot, but the company isn't very database-oriented. It's a cultural thing in the Java world, I think to disdain databases. Witness all the frameworks seeking to hide the database and make it more "object oriented" What can ya do.

BEA better not wait too long (1)

michaelmalak (91262) | about 7 years ago | (#20962753)

Fortune 500 companies are finally wising up to JBoss as an alternative to WebLogic. BEA better not wait too long waiting for a suitor lest it find itself an old maid.

Get real (2, Insightful)

einar2 (784078) | about 7 years ago | (#20964839)

Yeah, and pigs can fly...

Sorry folks, we speak here about enterprise computing. Nobody really cares for open source until it is a proven product. And JBoss is not in this league. If you run several million transactions per day and each transaction makes you one EUR or more, there is nothing open source can give you:
  • Nobody else with such a load is using JBoss.
  • There is not enough support for your installation (every hour downtime is expensive ...)
  • You cannot hire people off the street who are familiar with the product.
  • Selling open source to your management is difficult. Typically, there is no company big enough behind an open source product to be legally responsible for it.
  • Open source is no added value. If your run several million transactions a day then your are not a software company. Your competence lies elsewhere. Such companies never ever modify the source code of a product. Why should they? Modifying the code just makes the previously mentioned points worse...

BEA has a track record for enterprise products which in my personal experience is better than the one of IBM. IBM can get it right but it takes five years and several versions of their product. BEA can get introduce a new product in reasonable time and you do not have to wait three releases until it runs stable.

Re:Get real (1)

Pinky's Brain (1158667) | about 7 years ago | (#20965273)

Define "such loads". Mission critical systems running on 100s of CPUs? 1000s? What?

Since when? (0)

Anonymous Coward | about 7 years ago | (#20962809)

Does SAP need BEA for any reason? SAP is another level higher than Oracle an BEA, there is no competition regardless of what the stupid press says or what these companies say.

Guess that is one way to nuke competition... (1)

(H)elix1 (231155) | about 7 years ago | (#20963055)

If it happens or not, either way a prospect looking to buy BEA has to wonder if Weblogic (as it exists today) is still going to be around in a few years. The other big players will probably profit from the move.

BEA makes perfect sense (1)

valedaemon (612234) | about 7 years ago | (#20963107)

Purchasing BEA would greatly strengthen another Oracle acquisition, namely Stellent (now known as Universal Content Management). Although the CMS is a somewhat decent middle-tier system in and of itself (well, that's if ActiveX components, IE-only GUIs, and a highly inefficient, proprietary scripting language by the name of idoc can fall into the scope of "somewhat" or "decent"), many business that implement Stellent run it in conjunction with BEA with the use of a Content Integration Suite component. From a Stellent point of view, owning BEA would not only solidify Oracle's current technology investment such as ditching the above-mentioned "features", but it would also provide a wide, gaping gateway into other companies with BEA setups. Of course, the scope of the deal goes way beyond a CMS, but eliminating idoc would be worth that price tag alone. :D

Re:BEA makes perfect sense (0)

Anonymous Coward | about 7 years ago | (#20963381)

Ironically, some of the core products of BEA's AquaLogic Interaction suite (formerly known as Plumtree Portal) actually use Stellent technology.

And the Aqualogic Interaction division brings in at least 10% of BEA's revenue.

BEA better take it while they can... (2, Interesting)

billybob_jcv (967047) | about 7 years ago | (#20963139)

This is the first time BEA has seen $18/share since 2002 - they should look at any offer in this range as a gift from the gods. I remember talking to BEA sales reps back in 1999-2000, and man they were arrogant pricks! They were absolutely positive that you needed them waaaay worse than they needed you. Based on their latest moves, I'm not sure they've learned anything since then...

When Larry snagged PeopleSoft, they hurt BEA very badly - there are lots of PeopleSoft instances out there running under Weblogic, and if everyone else is like us, there is also a project in the queue to dump BEA and switch to the Oracle App Server on the next upgrade. Heck, why not? Why would I bother keeping a 3rd party app server in the mix when my ERP & DBMS are both Oracle, and Oracle can offer me OAS as part of a packaged deal? Combine that with the trend that intranet/extranet portal servers (like Plumtree/Aqualogic) are dead - either replaced by good web development/CMS or open source-based platforms - and IMHO BEA is in very deep dog doo.

Maybe their secret plan is to resurrect CORBA...

Re:BEA better take it while they can... (2, Interesting)

PCM2 (4486) | about 7 years ago | (#20963287)

This is the first time BEA has seen $18/share since 2002 - they should look at any offer in this range as a gift from the gods. I remember talking to BEA sales reps back in 1999-2000, and man they were arrogant pricks! They were absolutely positive that you needed them waaaay worse than they needed you. Based on their latest moves, I'm not sure they've learned anything since then...

I once talked to some BEA execs at the BEA offices as a member of the trade press, maybe around 2001. The BEA folks in the room told me (paraphrasing) that they didn't really care about press publicity, because there were literally only about six CEOs in the country whom they were interested in reaching. The others were basically not worthy. Seriously -- they said this.

Re:BEA better take it while they can... (1)

Stu Charlton (1311) | about 7 years ago | (#20963635)

PeopleSoft runs on Tuxedo, not WebLogic. You might be able to run integration services under WLS, but the core is a Tux app.

As for packaged deals, yeah, it makes competition hard, but we've whupped Oracle in competitive shoot outs on the product merits more often then not.

Re:BEA better take it while they can... (1)

billybob_jcv (967047) | about 7 years ago | (#20966149)

People soft is *currently* a Tuxedo app AND it was bundled with Weblogic & Websphere app servers.

Dude - wake-up and smell the acquisitions. You competed and won against Oracle in a different marketplace - when budgets were high, best-of-breed made sense and having PeopleSoft ERP + Oracle DBMS + BEA middleware was the smart play. Fast forward to Peoplesoft v9+ and beyond that to Oracle Fusion. Oracle has already said that PS will be certified on Oracle middleware - do you really think Oracle would continue being dependent on BEA if they don't own BEA?

My budgets are tighter than ever before, and I'm tired of the constant need to figure out which vendor is causing me today's heartburn. I want *one* throat to choke - and I want my budget dollars to go farther. If I can negotiate an enterprise deal for ERP, CRM, DBMS, Middleware AND OS support - a 3rd party better be willing to bend over backwards to have a chance of competing. BEA doesn't have a clue how to play in that game.
 

Re:BEA better take it while they can... (1)

Stu Charlton (1311) | about 7 years ago | (#20987365)

Fast forward to Peoplesoft v9+ and beyond that to Oracle Fusion. Oracle has already said that PS will be certified on Oracle middleware - do you really think Oracle would continue being dependent on BEA if they don't own BEA?

I wasn't considering vapourware as part of this discussion. No doubt you're correct that Oracle wouldn't want to be dependent on our software.

My budgets are tighter than ever before, and I'm tired of the constant need to figure out which vendor is causing me today's heartburn. I want *one* throat to choke - and I want my budget dollars to go farther. If I can negotiate an enterprise deal for ERP, CRM, DBMS, Middleware AND OS support - a 3rd party better be willing to bend over backwards to have a chance of competing. BEA doesn't have a clue how to play in that game.

Actually, BEA doesn't want to play that game, for similar reasons to why IBM doesn't play that game -- infrastructure is a separate concern from applications.

Many, many companies are separating these two concerns because they've been burned by the "one throat to choke" lock-in in the past. It's about writing a check blindly to your single source vendor , or actually taking control of your destiny.

Almost no vendor management organization worth its salt would put all of its chickens into one vendor's pot. Normally, 2 or 3 strategic vendors are the norm - not one. BEA has been lucky to be one of those in some industries that value infrastructure as much as applications (telecom, government (especially defense), utility, and some brokerages).

On the other hand, you're absolutely right that BEA doesn't play the games at the level of an SAP, given the relative budgetary sizes one speaks of with a BEA implementation ($m) vs. SAP ($100s of m). From my vantage point, it has been getting better at it, not worse, though this is sales region dependent.

Cheers

Re:BEA better take it while they can... (1)

tehcyder (746570) | about 7 years ago | (#20981855)

I remember talking to BEA sales reps back in 1999-2000, and man they were arrogant pricks! They were absolutely positive that you needed them waaaay worse than they needed you
That is pretty well a universal description of a good sales rep.

Why not Red Hat? (2, Insightful)

Envy Life (993972) | about 7 years ago | (#20963505)

I'm not sure why Oracle wants BEA Systems, which appears to be antiquated and riddled with issues at this point. As other posters have indicated, switching to JBoss is not only successful it saves a ton of money. It was near a year ago Oracle bid for JBoss, losing out to Red Hat, then created their own "Unbreakable Linux" distribution based on Red Hat Linux. If they're willing to plunk down $6.8 billion for BEA Systems, Red Hat, at a market cap of $4.15 billion is not only a relative bargain but seems to be a no-brainer.

A BEA employee's perspective (4, Interesting)

Stu Charlton (1311) | about 7 years ago | (#20963777)

I don't have insider information. I am not a spokesperson at this time. This is just my opinion.

Basically, BEA wants to stay indepdenent, because it lets us do interesting things if we keep shareholders happy. And, by and large, we had been doing just that for the past 3 years, until licenses started to fall earlier this year. Wall Street forces a quarter by quarter mentality that's very hard to meet in a midsized company, in my opinion, given that the nature of "infrastructure software" involves longer sales cycles than when the dot-com bubble kept the "J2EE app server" purchase orders flowing in.

For those that suggest BEA's WebLogic is somehow commoditized and is the source of all of our woes, please understand a few things:

- BEA sells a *lot* more than an app server. Both Tuxedo and WebLogic Server have not been a sales focus for years at BEA, at least in North America -- Tux is still growing in Asia. The core products are still a cash cow, so we invest most of our R&D into it, but it doesn't account for the growth we've had since 2002. Most of that has been from Portal, Integration, and the new AquaLogic stuff.

- BEA contributes a lot to Java open source -- it's on the Eclipse board, it runs two Apache projects, is a major contributer and partner with Interface21 (the Spring guys), etc.

- Open source has never been BEA's biggest competitor. IBM and Oracle are. Really. The reason is that a major portion of BEA's sales focus is on enterprise license deals in the $million$ range. In the smaller deals, that's more likely where you see .NET rearing its head a lot. Sure, there is some JBoss (and a lot more Tomcat!). But, JBoss generates around $22 million annually [news.com] . BEA makes that in under a week. And lest you say "But, this doesn't measure the free deployments!", we (and Oracle) don't care about those -- most companies aren't going to adopt an open source software solution for a production use without at least a support contract! Support , subscription, consulting, etc. is how RedHat is viable, it's also how BEA makes most of its revenue.

- BEA's *new* license growth had fallen recently, but maintenance and overall revenue continues to rise. That means that, the *rate* in which our middleware is being acquired is slowing for us as of late, not that people have somehow stopped buying our stuff. So, yep, we could be doing a better job improving & selling what we have with AquaLogic and WebLogic, but it's not doom and gloom times here. Maybe it will be better under another company, I donno. Part of the problem is that pure "middleware" in general is a hard sell, as companies like TIBCO are also feeling right now -- SOA was the latest trend, with some reasonable enthusiasm and growth associated with it, but the real fortune was made in the peak of the dot-com boom, and it's hard to replicate that sort of hype. Oracle sells middleware along side applications, databases, security suites, etc., so it's not quite as hard to sell the business on the benefits.

- I have no idea what the article is talking about with regards to SAP. I think NetWeaver is a crap pile, but that doesn't mean they're dead if they don't buy us. They could go open source, or improve it.... People stick with SAP because they're locked in, not because NetWeaver is supposed to be better.

- Even if this deal doesn't go through, BEA is viable enough to stay independent. It has over $1B in the bank, it generates high free cash flow, and if we could get this stock options review over & done with, we could actually have some good information for the Street to price us properly. The question really is about the stock price -- whether the shareholders think we can raise it on our own, or someone else can do a better job of it.

Anyway, I've been pretty happy with the company for the past 3 years. Regardless of what happens, it's exciting times.

A Developers Perspective (3, Insightful)

byronf (649750) | about 7 years ago | (#20964473)

I've been in the Java "Enterprise" domain for nearly ten years now. I first used BEA's weblogics back in 1999 (not even sure if it was owned by BEA yet). It was a good product, respected standards, and seemed to be development friendly. I considered it the best servlet engine at the time.

A couple of years ago I did a contract gig for a fortune 500 company that wanted to create corporate internal and external web portals. The company purchased the entire BEA middleware stack from Weblogics to Portal to Integration. The contract was several million dollars, with a support contract of several hundred thousand dollars a year. What a nightmare, we were working on weblogics 8.X using their workshop IDE (I called it Workswap), at the time you couldn't develop BEA Portal apps in any other IDE. The entire stack was buggy, and unreliable, including the IDE. However, workshop was pretty, and the BEA reps enjoyed demonstrating to the managers how simple it was to visually drop down a portlet, or a webservice, or whatever, and pow! Enterprise ready. The reality of course was much different. I decided then that BEA stopped being a developers company, and became a marketers company. Don't get me wrong, they are not the first, and will probably make bundles of money for a time, but it won't last.

These days I don't see any reason to purchase middle ware in the Java domain. You could make an argument for buying specialized tools or libraries, but not the big heavy applications servers with all the additional cruft that these companies make big money from. I see no advantage these products provide over what is freely available, well established, and standards based. The middle ware companies will preach support, and this strikes a chord with some managers, but it a complete fallacy. I've seen the valuable time of a company's senior developers wasted jumping through the hoops of a support process only to get some patch that works around a bug in the product. It would have taken much less time for the same developers to have been able to simple look at the source, and work the problem themselves. If BEA was smart they would sell now.

An integration architect's perspective (3, Interesting)

einar2 (784078) | about 7 years ago | (#20964893)

For customers, middleware is not that important anymore. We have all the middleware we could need. We are served, thanks.
Typically, customers look for business solutions. They look for standardized packages for their business domain. This is were SAP is getting stronger. (BTW, we had to tell SAP that we did not need middleware from their side...)
The whole SOA trend goes in this direction. To stop thinking about integration as technical plumbing but as connections with a business meaning. This is an arena where BEA has not a lot to offer. Their expertise is in plumbing (although they are very good at doing this).

Re:A BEA employee's perspective (-1, Flamebait)

Anonymous Coward | about 7 years ago | (#20965039)

You wrote: "BEA ... runs two Apache projects".

This is total nonsense. The ASF runs each and every Apache project. No company, whether BEA, or IBM or Covalent or whoever can, or should, claim to do otherwise. If they do, then it is obvious they lack the basic understanding of how the ASF works.

Re:A BEA employee's perspective (1)

Stu Charlton (1311) | about 7 years ago | (#20965447)

You're absolutely right, I misspoke. I meant two say, "Two Apache projects are run by current BEA employees".

Re:A BEA employee's perspective (0)

Anonymous Coward | about 7 years ago | (#20966337)

most companies aren't going to adopt an open source software solution for a production use without at least a support contract!

If only BEA's support was worth a darn. Since 2004, it has slid hard. Weeks, if not months trying to get a competent answer, and leaves our management wondering why we are paying BEA millions.

There's a lot to be said about being able to trace J2EE apps through the entire process with the full source to pinpoint adjustments and bugs. Can't do that at all with WebLogic.

Re:A BEA employee's perspective (1)

andawyr (212118) | about 7 years ago | (#20969077)

I think NetWeaver is a crap pile

Could you elaborate? I do Java development with Netweaver 2004s/7.0, and I'm interested in why you think it's a 'crap pile'. Really, I want to know. I've had a small amount of experience with BEA, and it was a long, long time ago, so I have no idea what the major differences are between them today.

SAP has created (or has purchased/modified) a very robust (and open) J2EE environment. It does have a few oddities (tedious develop/deploy/test cycle), but overall, I quite like the environment.

BEA? (1)

Anne Thwacks (531696) | about 7 years ago | (#20964425)

I thought British European Airways was merged with Brisish Overseas Aorwasy to form Brisihs Air many years ago

BEA is a dinosaur (1)

huguley (87575) | about 7 years ago | (#20966367)

You need to buy a BEA license to use peoplesoft. I think thats the only reason they are even around anymore. Oracle and BEA deserve each other.

Oracle wins even if it loses (1)

MrMischevous (1173277) | about 7 years ago | (#20966409)

This is a master stroke of strategy. Oracle does not have to win the acquisition battle for it to win the middleware war. Let's review the outcomes:

1) No one else steps up to bid, and Oracle ups its offer. Oracle wins BEA - the $17 offer was probably a low ball anyways.
2) BEA keeps refusing: Licenses fall because customers are unsure of the future. Oracle LOWERS its bid and the board forces a sale (as happened with PeopleSoft) or there are shareholder lawsuits because the shares fall below the $17 value in the market.
3) SAP enters the fray: Unlikely with the Business Objects bid in play.
4) IBM or Microsoft enter the fray: Unlike due to antitrust or technology reasons respectively.
5) HP enters the fray: possible, but HP is more of a services and system management firm.

If BEA tries to stay independent, it is harmed because its future is now in doubt because it is seen by everyone as "in play." IBM and Oracle become the "safe" choices for corporate purchases of middleware. If it gets bought by anyone, it is removed from the marketplace while it is integrated into its new parent. Oracle wins the war regardless of the outcome.
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