BEA to Oracle: We're not opposed to a reasonable offer
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BEA has told Oracle that it would, in fact, entertain an acquisition offer -- just not the one Oracle has proposed.
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(InfoWorld) - In a little more than a decade, BEA Systems built itself into a top middleware player and one of the leading lights in SOA. Thatâs a good thing. Revenues at BEA are soaring (up 19 percent in the latest quarter) and the companyâs stock price rose around 50 percent in the last year. But playing in a hot space such as SOA is a classic instance of having the tiger by its tail. As CEO Alfred Chuang told InfoWorld Executive Editor at Large Eric Knorr in a recent interview, the company still needs to move aggressively to avoid being left high and dry by rapid shifts in the technology landscape. InfoWorld: What do you think is the future of enterprise software and where does BEA fits into it? Alfred Chuang: You will have vendors like us that will be selling platforms (and) application vendors that will be selling application components, yet they will be assembled on the fly by an end-user. End-users will be using a tool -- or they will be using templates or processes -- that will represent what their environment is. They can always go back to change the process on the fly, yet the components will continue to be usable within those processes. One big advantage: Youâll be able to upgrade component functionality without affecting the process itself. Today, this is a total mess. IW: Where do you think SaaS (software as a service) will fit in to this vision?                                                     AC: Like when you rent a car, you donât really care much about your car. When people drive a rent-a-car, they drive very differently from when they drive their own car. You see the craziest man driving around the hills of San Francisco in a Ford Taurus -- itâs likely to be me -- and Iâm killing the brakes coming down the streets of San Francisco, flying over the hills, because I donât give a crap. Now, if itâs my own car that Iâm driving, itâs very different. Iâll be parking at the corner parking station and making sure nobody can possibly ding me. There will be people who want full flexibility, so all they want is a rental car. There are people who will want ownership so badly ... that they will buy the software. SaaS will be able to attract small groups in large corporations, or small organizations, period. I think a successful company, including ourselves, even at the middleware layer, will have to offer both to people. IW: So youâre not ruling out offering some of what BEA offers now as a service? AC: Not only am I not ruling it out, we have to do it.Â  Iâm saying itâs not going to be 100 percent of the world. IW: What about the effect of the open source model? AC: Open source is the ultimate tool to keep us honest, especially on pricing. Linux is a good example. I spent the first half of my career from the very beginning of Sun until they were several billion dollars in size. For the longest time, Solaris was the reason people would buy a very, very expensive box. All of a sudden, people did not notice -- especially the people at Sun -- that the API was no longer dependent on Solaris. Weâre not calling any of the functions directly on the operating system anymore. They are programming that to things like J2EE. So overnight, what happened is someone came up with a computer running an operating system that J2EE can run on. Literally, thereâs no porting, thereâs no changing, nothing. In fact, the same application is being extended by buying more CPUs running Linux. Linux totally commoditized Unix in the marketplace. Open source serves [another] very important purpose, I think, which is education. SOA [service-oriented architecture] is lifting us to a different level. Look at the application server or integration software. You really want to educate developers? Let them tinker with whatâs inside so they fully understand what theyâre dealing with. A smart vendor will always watch whether their software is being commoditized. And itâs not wrong to be commoditized as long as your volume catches up with it. You must continue to innovate in abstractions at higher and higher levels. The demand is unlimited at this point in time. Look at our appetite for Internet applications. It is absolutely insatiable. We want more and more and more. I want to do everything on the Internet. If Iâm booking an airline ticket -- I just came back from Asia last night -- I did the whole thing in my car on my 3G BlackBerry.
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The latest craze in software: giving stuff away. BEA Systems, Computer Associates and IBM all recently started releasing the source code, or underlying instructions, for some programs, which amounts to distributing those products free. Even the loosest definition of incentive rebates would probably stop short of 100% discounts, but then the economics of software are peculiar (see story, p. 161). The giveaways were celebrated, especially by the noisy "open-source" movement, which wants all software distributed this way. (They're not kidding.)
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Business software giant Oracle remained at odds Friday with BEA Systems over a potential takeover bid after the two rivals exchanged letters holding firm to their positions over the price for BEA.
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Oracle has rejected&#160;BEA Systems&#39; proposed purchase price of $21 per share, calling it &quot;impossibly high&quot; for Oracle or any other company to pay.In a letter to BEA&#39;s board dated Oct. 25, Oracle again urged the company to accept its offer of $17 per share, an amount that Oracle said it was &quot;unwilling to increase.&quot;&quot;The $21 per share price is a multiple of nearly eleven times BEA&#39;s last twelve months&#39; reported maintenance revenues,&quot; wrote Oracle President Charles Phillips. &quot;Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales.&quot;He noted that Oracle was the only company making an offer for BEA. &quot;Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share,&quot; Philips wrote.Oracle again urged BEA to put its offer to a shareholder vote.&#160;Oracle&#39;s bid of $17 per share&#160;values BEA at about $6.7 billion. A price of $21 per share would value it at $8.3 billion.Oracle said it had an obligation to its own shareholders to &quot;exercise price discipline when evaluating acquisition opportunities.&quot; It reminded BEA of its&#160;deadline of Sunday evening&#160;to accept the offer, after which it will &quot;move on&quot; and consider other acquisitions.Oracle made its surprise bid for BEA on Oct. 12, hoping to strengthen its line of middleware products and grow its customer base. BEA, which had been under pressure from investor Carl Icahn to sell, quickly rejected the offer as too low, and on Thursday came back with its suggested higher price. Oracle&#39;s offer &quot;significantly undervalues BEA&quot; and is not in the best interests of BEA&#39;s shareholders, it said on Thursday.BEA officials weren&#39;t available for comment on Oracle&#39;s latest letter.&#160;
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A company board member testifies in trial that a sale would be possible if Oracle ups its offer.
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$21 per share? You're having a laugh Oracle scoffed at BEA last night, describing the middleware's self-set $21 per share price tag as "impossibly high" and saying it had no intention of raising its offer.â¦
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BEA let the bid's deadline expire, as it promised it would, and Oracle won't rule out another try.
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Business software maker Oracle Corp. agreed Wednesday to buy BEA Systems Inc. for about $7.85 billion, a compromise price that ends a months-long dispute over the value of the company that pioneered Web services software.
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BEA Systems made good Sunday on its promise to let a 5 p.m. Pacific Time&#160;deadline expire on Oracle&#39;s $17-per-share offer to buy the company.
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The board of BEA Systems Inc  said on Monday that it is still looking at ways to maximize shareholder value, including the possible sale of the company, after a bid from Oracle Corp  expired on Sunday.
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Oracle Corp  President Charles Phillips said on Thursday that his company would not raise its $17 per share bid for BEA Systems Inc , which expires on Sunday.
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Not to be outdone by rival Oracle, BEA Systems has unveiled version 9.0 of its WebLogic Server application server. Homing in on the theme of service-oriented architecture deployment, BEA said the product would
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Oracle's offer of $17 per share? No thanks, BEA says again--and this time, it's countering with what it sees as a better value for its shareholders.
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SAN FRANCISCO, Oct. 26  Â The business software maker BEA Systems signaled its intent to let Oracleâs $6.7 billion takeover bid expire Sunday, setting the stage for a showdown with its largest shareholder, the billionaire investor Carl C. Icahn.
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Oracle has rejected BEA Systems' proposed purchase price of $21 per share.
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REDWOOD SHORES, Calif. -- Business software maker Oracle Corp. said Wednesday it agreed to buy BEA Systems Inc. for about $7.85 billion, a compromise price that ends a months-long dispute over the value of the software company.