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ORACLE BEA - Chuang Will Be Dragged Out Kicking and Screaming

'The combination just makes sense from most angles I can think of: Fleury

(October 13, 2007) - Marc Fleury - who started JBoss in the early 2000, sold it in 2006 and is now retired - has been commenting on Oracle's $6.6BN bid for BEA Systems. "The combination just makes sense from most angles I can think of," he writes. Of Alfred Chuang, BEA's current CEO, he predicts: "It is going to get nasty and he *will* be dragged out kicking and screaming."

In Fleury's view, the bid is well-founded. "The combination just makes sense from most angles I can think of," he writes.

Here is his reasoning:

"Product wise, this acquisition probably puts Oracle as market leader in terms of marketshare by a comfortable margin. By consolidating BEA and ORA's market share they are leapfrogging both IBM's websphere and RedHat's JBoss.

From an financial standpoint, Oracle grows by executing correctly on their strategic acquisitions. They have a track record here, they deliver consistent 30% growth on a behemoth of a company by not screwing up what they buy.

From a operations standpoint, executing on this one is fairly straightforward for them. The sales models are the same, the business models are the same, pretty much everything but development can go, extracting immediate EBITDA anywhere from 30% to 60% depending on how far they want to cut it. In that sense, even though ORA stock is down 2% on the news, this one may make complete numbers sense."

But Fleury wouldn't be Fleury if he didn't allow himself a little irreverence...and Alfred Chuang - just as industry blogger James Hamilton also gave the same day - is given the full treatment:

"Obviously the crazy dude over at BEA is going to put up at least a simulacrum of a fight. Thinking of it, I expect Alfred "I am compensating for..." to put a heartfelt final battle into this, he has probably already super-glued his naked chest to the BEA boardroom table. It is going to get nasty and he will be dragged out kicking and screaming. Alfred will mumble something about not wanting to be Larry's power point bitch, or waxing his boat, or some other non-sense. But Larry is going to make sushi of that board and will feed it to the koi fish he has in his compound and cost more per head than Alfred's car... This one is going to be funny to watch. Pass the popcorn please."

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Most Recent Comments
Managing Offshore IT 10/15/07 08:20:50 PM EDT

Trackback Added: Continued ..the offshoring angle on Enterprise Applciations, M&A; In addition to the points I made in my earlier blog, I should include the fact that offshoring players, especially tier-1 firms are certainly in the ‘strategic mix’ of technology consulting, product selection and technology roadmap definition. The flip side is the risk of “collusive consulting” that Michael points out. Addressing such risks is challenging at best of times for client organizations: sourcing managers and technology leaders have the responsibility of ensuring due diligence and enforcing a robust governance, and to build the right checks-and-balances. And when due diligence slips through the cracks… don’t just blame the consultants. :-)
Here I would agree with Michael: I too would urge savvy IT decision makers to heed the durable latin warning: caveat emptor (buyer beware).

ByeByeAlfred 10/13/07 07:02:30 AM EDT

"We are growing...more than ten times faster than BEA," Larry Ellison was quoted as saying in May.