LiteBytes from Lustratus Research

Why Oracle should buy Tibco next

Only a few months ago, I said that Tibco would not be bought and stated:

"With Tibco, there is no obvious buyer (as Oracle was with BEA) nor is there a neat fit into one of the majors (as BusinessObjects was with SAP).  Of the 4 listed by the "Analysts" quoted above, only IBM would make any sense.  And Oracle, except that it is busy trying to eat BEA."

I now wish to recant and disagree with Steve's view that HP will get the prize.  Now that Oracle has BEA, the next obvious target for it is Tibco and it should move quickly before IBM steps in.  Here are my reasons:

- Tibco has the only big league competition to IBM's WebSphere-MQ in the message oriented middleware space.  It is used widely in the largest financial services companies, telcos and beyond.  With Tibco combined with Oracle's database etc and BEA's application server, Oracle would have the fire-power to take on IBM's hold in these accounts.

- Tibco has developed its BusinessWorks integration product which plays in the SOA/EDA/BPM space.  This is one of the best development tools I have seen in this space as well as being mature.  Combined with Oracle's and BEA's reach, BusinessWorks could deliver in the SOA marketplace in a way that it can't with a standalone Tibco.

- It would only cost $1.4bn (plus a bit of course). :-).

And finally what both Oracle and IBM have shown is that in this market there is no such thing as buying a company too soon - if you don't buy, somebody else will.

Ronan

p.s. I don't have shares in Tibco.   

Why Tibco won't be bought next

Ranadive, CEO of Tibco, has announced that Tibco board would of course consider offers.  And after the recent news about Business Objects and BEA, such offers may seen inevitable.  Jeff Schenider of MomentumSI for instance argues that we have entered a period of inevitable consolidation.  While I certainly think we are already in an era of big-4 and the rest, that does not necessarily mean that every 'small' software company (and remember these are only small in comparison to the giants) must be bought.

The Reuter's piece covering Ranadive's statement comments that "Analysts have said suitors for Tibco could include IBM (NYSE: IBM), Hewlett-Packard (NYSE: HP), Sun Microsystems (NSDQ: JAVA), and EMC (NYSE: EMC)."

I personally wonder.  On the one hand you could ask why not?  Tibco has excellent top tier customers who use its long standing messaging products for core business processing.  It also has some of the best SOA products in its BusinessWorks portfolio - combining enterprise grade reliability with good tooling.  However, I think you need to look a little deeper about the two acquisitions which sparked this consolidation talk: 

BusinessObjects is in what should to be the hot growth area over the coming years - business intelligence - and thus is perfect for the vendors who want to find a new thing to sell to their customer base or a new way to justify their existing product line (by adding a BI layer on top).  Business Objects should have been a target for IBM and Oracle as well as SAP.

BEA was generally believed to be a long term target for Oracle - BEA had after all used the application server wave to capture business from so many of Oracle's enterprise customers.  Oracle first took quite a while to take application servers seriously and then took quite a while to become competitive.  Buying BEA finishes the job off quickly and gets back ownership of all those straying BEA customers.

With Tibco, there is no obvious buyer (as Oracle was with BEA) nor is there a neat fit into one of the majors (as BusinessObjects was with SAP).  Of the 4 listed by the "Analysts" quoted above, only IBM would make any sense.  And Oracle, except that it is busy trying to eat BEA.  Therefore, I don't see Tibco being bought except unless it is Skyped (bought for over the odds to avoid somebody else buying it).

Ronan 

Oracle moves to buy BEA: The end of the J2EE era?

Oracle has finally done what so many rumours have pointed to for at least a few years: made an offer to buy BEA.  I am sure that there will be much comment on the challenges of dealing with the total overlap between BEA's core product - the WebLogic applications server - and Oracle's application server (both in the top three by most measures of market size).  The move should also take the wind out of speculation that Oracle will make a spoiler bid for Business Objects. 

The writing off of BEA as a business by some has been totally over-stated.  However, I think if this bid is successful it does marks the end of the J2EE era.  Not that I am suggesting that J2EE application servers are going to go away of course.  Rather, the world has moved on from what created that market in the late nineties.  At one end of the spectrum, the focus has moved back towards technology independent architectures with SOA (just as CORBA attempted to do in the pre-J2EE days - all be it by creating another set of technology).  At the other end, lighter weight approaches such as Spring have superceded the heavier and more complex EJB model (which to be fair has also moved with the times but probably too late).   

It is also worth noting that the disappearance of the large enterprise focused ISVs continues - in one week we appear to be losing another two.  It is beginning to look like that the enterprise software market is heading for a strongly polarised world made up of a big-four (MS, Oracle, IBM and SAP) with a huge gap to the next division. 

Ronan

EDA vs SOA

I have been involved in some recent research into event-driven architecture (EDA) and its relationship to service-oriented architecture (SOA), as a result of confusion abounding over the two concepts. Some people seem to think EDA = SOA 2.0. Others that they are already doing EDA in their SOA implementations because they are using asynchronous communications such as a JMS or IBM WebSphereMQ. This confusion is exacerbated by vendors with their own agendas - TIBCO has been banging the EDA drum for ages as the preferred way to go to solve integration problems, IBM has just held a massive event to drive its own SOA agenda, Oracle seem to be trying to straddle the two approaches, and complex event processing (CEP) vendors like Progress have their own stories about EDA.

My own analysis, together with Dr. Ronan Bradley, also of Lustratus, has concluded that as is so often the case, the problem comes down to confusion over terminology. EDA is an architecture, just like SOA. It is a way of running operations, and before anyone starts to ask whether I am on the side of SOA or EDA, the two can happily coexist. But the confusion arises when people start to use EDA as a term to refer to particular implementations rather than to the architecture itself.

In fact, we identified 3 major ways that EDA relates to SOA, and concluded that EDA may have a key role to play as SOA matures - to deal with the increasing management complexity of widescale SOA deployments through a 'management by exception' approach.

For those interested in reading the detailed research, Lustratus has published an Insight on the subject, available at the Lustratus site.

Steve