Monday, September 12, 2005

Who is the next big target for Oracle?

Everyone has been predicting of Oracle buying Siebel ever since CRM in its "sieblest" form went out of fashion. It was one of the highly underutilized software packages sold in the recent times making customers disillusioned with the product having bought it paying millions. Oracle will do exactly the same thing to siebel what it plans to do to Peplesoft. Phase it out.

With Oracle clearly on the path to consolidation by acquisition (executing on what Larry said a while back anyway), it is really interesting to try to figure out which company would be its next big target. If you ask me, three companies come to mind. The two immediate ones in the order of priority are - BEA, Sun. I will talk about the third company a bit later. I know it sounds a bit out of the world but if you think about it, it makes perfect sense. BEA anyway makes a lot of sense because it is an enterprise software company, mature product with well established customer base, slowing growth, struggling to give returns and expands Oralce's software product base in a very significant way. Sun looks a bit less intuitive but if you think about it, the three companies together is what IBM is without its global services. There are two giants in the IT business - IBM and Microsoft. Oracle is not going to be another Microsoft ever. Microsoft's position is going to be taken by Google and that is a topic of another blog. That leaves Oracle to try to become another IBM and hence these acquisitions take Oracle on its path towards that. This combined entity then needs a consulting outfit to challenge IBM in its entirity. That is where I think Oracle could get a bit creative and look at acquiring one of the large Indian IT services players (Infosys, Wipro, Cognizant, TCS, etc.) rather than Deloittes of the world. The Indian IT players are the role models for IBM global services and Oracle can get that expertise and business model in one shot. What the Indian IT players lack by way of a weak front-end (dominant presence and inroads in the US corporate) can be beautifully complemented by Oracle's own presence in the market.

So, if Larry is on a consolidation mode and wants to be the biggest player in the technology space, I would bet on this path to be the most probable path. What are your thoughts?