SearchOracle.com spoke with Gene Phifer, lead analyst for Oracle with Stamford, Conn.-based Gartner Inc., to find out where his firm believes these two software goliaths will go looking for their next score. Phifer also summed up the overarching goals of Oracle's acquisition strategy so far and offered an update on the progress of Fusion, Oracle's drive to integrate the spoils of its buying spree onto its Fusion middleware platform...
How would you sum up Oracle's acquisition strategy over the past few years?
Gene Phifer: Oracle has gone through a significant number of acquisitions over the last few years and it's obvious from the mix of vendors, both infrastructure technology vendors and applications vendors, that they're trying to have a much larger role in the world of business applications and in providing what we call the business process platform -- a soup-to-nuts set of infrastructure technologies to facilitate modern business applications. They're trying to be a much bigger player there. A big chunk of the acquisitions were apps. Starting with good old PeopleSoft back in 2005 and moving on to Siebel, they really have snapped up a lot of the big competition in the apps space. The monster players out there now are Oracle and SAP, and the other players out there in the applications world are much smaller in nature. So that's the strategy [and] we don't necessarily think they're done. They've done most of their acquisitions, I think, for the time being, but there may be some other things that they'll pick up over the rest of this fiscal year.
Some experts I've spoken with predict that Oracle -- at least for now -- is finished buying major software companies and will instead focus on smaller firms that can round out its technology stack going forward. Do you agree with them?
Phifer:Well, if you look at the applications side, there are not a whole lot of large players left. I guess they could always buy SAP, but that won't work [laughs]. I would say that they're going to focus on infrastructure software. I think they're going to be looking at point acquisitions of selected infrastructure components. But you know, even in the infrastructure world, who are they going to buy? They're not going to buy the likes of an IBM or a Microsoft or a Sun or any of those guys. But they could potentially buy a BEA, and we thought years ago that they might. But they seemed to have focused most of their middleware strategies on internal development, so we think it's less likely now that they'll go after somebody as big as BEA. More likely, they'll go after someone who is smaller … and much easier to absorb into their technology base.
What types of technologies do you think Oracle will look to acquire next?
Phifer: I think they'll look at the world of service-oriented architecture (SOA) and the things that are required to deliver a robust SOA set of capabilities. Perhaps some things on the development side, the compositing side, the orchestration side… those kinds of SOA-centric capabilities, and also management technologies, because managing Web services is very different than managing traditional technologies. SOA-centric and Web services-centric areas are where we speculate that most of the further acquisitions will come from.
What other types of technologies are ripe for acquisition by Oracle?
Phifer: I think you have to look at the new era of the Web, or Web 2.0 [as it is called]. It depends on how aggressively [Oracle wants] to get into the world of Web 2.0, but they may be looking at some technology acquisitions there to fast-forward their entry into that [space]. That could include acquiring capabilities around AJAX, around building mash-up types of applications -- everything from blogs, to wikis, to social networks, you name it. There are a lot of Web 2.0 types of applications out there, and I wouldn't be surprised to see some of them show up [in Oracle's portfolio].
What exactly is a mash-up?
Phifer: A mash-up is a special type of composite application. The term came in with the Web 2.0 world. The idea is that I can take two or more existing Web sites and I mash them up. I select information from those two sites that I can correlate. A great mash-up would be a store locater. Say I've got a Web site that's got a listing of addresses for my retail store outlets, and I've got a mapping site like a Google map. I can mash those two together and display a visual of the locations of my stores.… I think you'll see a lot more focus on the mash-up style of composites and on the use of REST/POX as a methodology for building those kinds of enterprise mash-ups going forward. And having the right kinds of tools to help customers build those is what the software vendors have to think about.
Several recent reports suggest that SAP, which in the past has relied mainly on internal development for growth, is getting ready to embark on its own acquisition strategy. What types of technologies do you think SAP might acquire?
Phifer: I think you have to look at what SAP has. They've got a pretty complete portfolio of applications, but you know they may be looking more on the vertical side because Oracle's got a pretty broad set of vertical industry applications. I think SAP is also probably going to be looking at some spot acquisitions of infrastructure software as well. As I said, this whole SOA/Web services world is a lot of big stuff. I think SAP recognizes that they've got to plug some gaps in the overall infrastructure base, and acquiring that technology could be a good way to do it.
Oracle has promised the first round of Fusion-enabled applications in 2008. Do you think they'll be on schedule?
Phifer: We think Fusion will see the light of day in 2008, and really that is going to be the first advent of a deliverable. It won't necessarily be done by then, [but rather] that is going to be the first release and then they will continue to add on and make subsequent releases. If you look at the existing applications that Oracle has, Fusion is going to be the next evolution of their [E-Business Suite] suite of application software, and Fusion CRM will be the next evolution of Siebel. But as far as things like J.D. Edwards and PeopleSoft, we're not going to see all of the functionality there encompassed in the [first] Fusion release. That's one reason the "applications unlimited" strategy is actually a good thing, because they will be supporting these existing heritage applications for an indefinite amount of time and continue to move those forward as well. Fusion is going to be their new SOA-based stuff. It's going to be their newly service-oriented architected set of applications that will deliver agility to their end users that the traditional heritage applications won't be able to deliver.
This article originally appeared on SearchOracle.com.