Why should investors dictate at BEA?
BEA is playing a dangerous game–especially if you believe no other company wants it at that price. BEA may be a leading middleware company, but the writing is on the wall: Girth wins in enterprise software. Oracle and BEA makes sense. HP and IBM could also be buyers. But it’s a small list of buyers. If BEA stays independent it’s likely to get run over.
Why is it the moment a takeover is in play, the potential acquiree is relegated to also ran loser status? What does it say for customers who have bet their businesses on a tech company? This was something I asked my Irregular colleagues.
The consensus view is that whether you know it or not, investors are in charge of your IT investments. They determine whether you're wasting your money on product that will be rendered obsolete or put in maintenance mode through acquisition. As a fervent customer advocate, I find this state of affairs both depressing and chilling. I'm not alone. Vinnie Mirchandani had this to say in our group discussion:
I cannot believe so many financial analysts are beating up on BEA for saying no to Oracle. M&A is only one path to shareholder value creation, Next time I hear one of them hype SOA or middleware I will ask them - then why do you think BEA could not have grown on its own? We have created this "dead pool" of companies and made it self fulfilling and then get mad when a company resists.
Crazy isn't it? Vinnie says he has long advocated the appointment of a board member from the customer community, a sentiment with which I agree. It's a proposal that has about as much chance of happening as I have of participating in the next moonshot. But maybe I'm wrong.
When I mentioned the Oracle 10>11 upgrade I'd almost forgotten just how vociferous the Oracle user groups were at the time. I recall the vitriole and howls from users, much of which was communicated behind closed doors but which occasionally leaked out into the wider world. Today we have blogs that can serve the same purpose.
There may be a lot of reasons why BEA should be acquired. Jeff Nolan thinks:
BEA on it's own will die a slow and painful death. It's like the modern equivalent of Unisys.
Word in the customer community is that BEA is struggling to make buyer shortlists. Others think BEA leadership has let investors down consistently over time. Ouch!
But automatically consigning BEA to the dead pool is not a good way to go about it. The last word goes to Vinnie:
In the end the investors need to rule but right now there is close to zero buyer input in these M&A decisions. Not that they do not have influence after the fact. See how dramatically just about every company Oracle and IBM acquires loses new license momentum...but for existing software investments, M&A definitely causes concern and confusion.