Tuesday, October 03, 2006
Making sense of Oracle's acquisition spree
Making sense of Oracle's acquisition spree:
Q: "How would you rate the success of Oracle's acquisition strategy so far?
Michael Fauscette: I actually believe that they have been successful to maybe very successful and I think that maybe the jury is still out on the very successful part for the long term. But all the signs point to a very strong strategy that has played out very well for them. In fact I would say that it looks like SAP is even starting to change [as a result]. Their original plan was organic growth, and now it looks like they're starting to adopt a more aggressive acquisition stance as well. In some ways, that -- as well as the fact that the numbers this last earnings call were very strong -- validates Oracle. They seem to be moving in the right direction, and it seems that the integration has gone well … on the small end, and it seems to be moving along in the large acquisitions as well. I think they have a very well-managed corporate development organization. "
Q: Experts I've spoken to say that SAP has a more rigid or proprietary approach designed to get customers to buy into their whole stack. In today's world, does that approach close off options for SAP?
Fauscette: It does close off options. It gives you complete control if the customer happens to buy into it. But it's not a strategy that is particularly popular with customers these days, at least not in my opinion -- and that's absolutely an opinion. There is a great deal of pressure from governments and from corporations in general to make things more open so that they can operate in multivendor environments.
Q: "How would you rate the success of Oracle's acquisition strategy so far?
Michael Fauscette: I actually believe that they have been successful to maybe very successful and I think that maybe the jury is still out on the very successful part for the long term. But all the signs point to a very strong strategy that has played out very well for them. In fact I would say that it looks like SAP is even starting to change [as a result]. Their original plan was organic growth, and now it looks like they're starting to adopt a more aggressive acquisition stance as well. In some ways, that -- as well as the fact that the numbers this last earnings call were very strong -- validates Oracle. They seem to be moving in the right direction, and it seems that the integration has gone well … on the small end, and it seems to be moving along in the large acquisitions as well. I think they have a very well-managed corporate development organization. "
Q: Experts I've spoken to say that SAP has a more rigid or proprietary approach designed to get customers to buy into their whole stack. In today's world, does that approach close off options for SAP?
Fauscette: It does close off options. It gives you complete control if the customer happens to buy into it. But it's not a strategy that is particularly popular with customers these days, at least not in my opinion -- and that's absolutely an opinion. There is a great deal of pressure from governments and from corporations in general to make things more open so that they can operate in multivendor environments.
