Tibco CEO Tells All About the Oracle-Sun Buyout

When Oracle (Nasdaq: ORCL  ) and Sun Microsystems (Nasdaq: JAVA  ) unite, you know that things are changing in the enterprise software business. That's why I'm excited to report on the view from inside that industry.

Last night, I got on the horn with Vivek Ranadive, CEO of Tibco Software (Nasdaq: TIBX  ) , for a candid rundown of what this merger of not-quite-equals means for his business -- and for Silicon Valley at large.

Oracle just did Microsoft a favor
First off, Vivek explained that Sun chairman and co-founder Scott McNealy was an old friend who had helped him get into business years ago. Seeing Sun made into a footnote in computing history saddens Vivek on a personal level.

That said, Tibco is one of many companies that should benefit from this move, in Vivek's opinion. "People don't want to put all their eggs in the Oracle basket," when designing their IT infrastructures and systems, which presumably should drive many traditional Oracle Fusion shops and Sun Enterprise Service Bus accounts to look at third-party alternatives.

That's a positive for Tibco, International Business Machines (NYSE: IBM  ) , and Microsoft (Nasdaq: MSFT  ) . There are other rivals in this space who will benefit as well if you accept the premise that all-Oracle IT shops -- from bare-metal hardware to end-user applications and everything in between -- could be a bad business decision for its clients.

What happens to Java?
"The Java community is going to be concerned," Vivek said. Oracle CEO Larry Ellison "likes to buy commodity has-been companies" and dismantle them by gutting R&D efforts on the newly acquired products. "I'm sure it'll be highly accretive at the start, but it's the end of innovation." And with Java under Oracle's control, that puts SAP in a difficult position -- the German business intelligence specialist builds most of its software on the flexible and nearly hardware-agnostic Java platform. That's another source of nervous customers who might jump ship and go to Microsoft or Tibco.

Oracle is also buying into a slew of open-source projects under Sun's wing, including database platform MySQL, the OpenSolaris operating system, and MS Office competitor OpenOffice.org. "Oracle and open source?" Vivek chuckled. "That's an oxymoron if I ever heard one!" The database giant sure doesn't have much of a track record in open-source support, and the survival of these product lines may be in question now.

Server fallout
Of course, the server hardware market changes dramatically with this acquisition. If a corporate customer is looking to refresh a data center built around Sun systems and running Oracle databases (a popular combination), that's a monolithic experience now. And the "superstore" concept has historically not worked out so well, whether it's about CA (Nasdaq: CA  ) trying to be every computing solution to everybody, or Citigroup in banking. Why would it work out better for Oracle? IBM is the shining exception to that rule, but "there is only one IBM," if you ask Vivek.

The obvious counterargument to Mr. Ranadive's bullish view here is that some companies would prefer tight integration and one-stop shopping. But customers who really want the whole top-to-bottom stack in one package might have gone with IBM to begin with. Those who kept the server and software vendors separate on purpose could be happier elsewhere now.

"Cisco Systems (Nasdaq: CSCO  ) -- I think it helps," Vivek said, "because they are a new entrant in the server business." It's a fresh alternative tied only to networking structures, with no legacy enterprise-class software offerings to bog it down or dilute the value of a Cisco server.

Parting words
To sum up the new situation, Vivek said: "I don't wanna toot my own horn, but I feel like we are big winners in this. Because people will gravitate towards a third party that can arbitrate between all these different factions -- arbitrate between Microsoft and Java -- and so we feel that this will help us in all sorts of ways."

Tibco will "aggressively go after Oracle customers -- all of our mutual customers" now that the competitive landscape has changed so dramatically. And Vivek doesn't think it's going to be too hard to convince many Oracle customers to trade in their middleware platforms, which is the segment in which Tibco competes. "They have four or five middleware products [including Fusion, the new Sun stuff, JD Edwards, BEA, and more], so which one are they selling?"

Food for thought, indeed. I'm a longtime fan of Tibco's unique market position, and I agree with Mr. Ranadive's positive assessment of the new situation. Oracle may be the big spender in this scenario, but Tibco, IBM, and Microsoft are the real winners.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. This article was written using OpenOffice Writer, which has been Anders' preferred word processor since 1999. Please don't kill it, Larry! You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (12) | Recommend This Article (18)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 22, 2009, at 5:38 PM, wwwravim wrote:

    Vivek Ranadive, CEO of Tibco Software can keep dreaming while the rest of the world moves on...

  • Report this Comment On April 22, 2009, at 6:28 PM, T00t wrote:

    Java is very strategic for Tibco - 95% of Vivek's software is built with it.

  • Report this Comment On April 22, 2009, at 8:28 PM, TMFZahrim wrote:

    Well 95% of its software will run on Java -- and also on Microsoft's .NET platform. Being neutral is kinda Tibco's "thing," and has been for years. "The Switzerland of enterprise computing," the glue that binds heterogenous IT environments together, that sort of thing.

    Anders

  • Report this Comment On April 22, 2009, at 8:28 PM, bswamy1 wrote:

    Everyone is entitled to day-dreaming and why should Vivek not have his quota. He has made a lot of assumptions here and has not been entirely factful about Oracle's treatment to acquired technologies. Over time he will learn to re-assess the situation. While customers do want to have choices, they would rather have a working solution that aids their business and not bother about heterogenity for the sake of it.

  • Report this Comment On April 23, 2009, at 12:27 AM, shyshiloh wrote:

    Screw all of your comments - I work for Oracle and hate it and unfortunately haven't had a good offer to leave.. its hell to work here. 24/7 of bs managers and stress is unbelievable.

    if oracle was able to make us sell our selves (you know what I'm talking about) to seal a deal they would let us! they are jack&^S

    Run Sun employees as far away as you can from the nitwits of Oracle!

    Ellison is only interested in how much he can monopolize the industry because the Man is Bored!

    Apparently, wife number three isn't doing her job...

  • Report this Comment On April 23, 2009, at 2:29 AM, T00t wrote:

    <quote>

    and also on Microsoft's .NET platform

    </quote>

    Actually, not true. The only significant thing that TIBCO owns that runs on .Net is the UI for Spotfire.

    All their EAI, ESB, SOA, CEP, B2B, BAM, MDM software is implemented with plain old Java. Yes, it can integrate with .Net, but it's not built with it. The exception is the BPM engine, which is 10 years old and implemented using C/C++. I should know, I work there...

    Anyway, hopefully Larry will buy Tibbers later in the year when they've had 2 more crap quarters (licence down 20%) - I can dream anyway.

    And have you ever actually been to Switzerland...?

    :-)

  • Report this Comment On April 23, 2009, at 8:35 AM, mfjy wrote:

    Outside of the obvious concern about Java's treatment within Oracle, my opinion is that large companies will be very interested in a bundled Oracle solution that includes hardware, OS, database, and middleware (and beyond!). In contract to this article saying that IBM will benefit, I think Oracle's move provides large companies with a direct alternative to IBM-Pseries-DB2-WebSphere, and this will put price pressure on IBM. If you are a CIO for a large company and IBM knocks on your door, tell the IBM sales guy that you are considering Oracle in order to get a better price.

  • Report this Comment On April 23, 2009, at 12:34 PM, Aggiemedic01 wrote:

    I think this will have the Open Source community quite concerned. Java and MySQL have been mainstays and both are put into serious doubt now. I'm in the academic world and so don't have a lot of insight into the concerns of businesses, but it is now time (probably well past time) for me to take a careful look at alternatives. Our IT guy only half jokingly suggested that we switch to PostgreSQL in our weekly meeting today. I suspect we'll be moving in that direction pretty soon.

    I trust Oracle to be the keeper of open source projects much less than I trust Sun (which wasn't much). I think this move will also make folks think very carefully about selling open source tools to companies.

    Best wishes to Tibco.

  • Report this Comment On April 24, 2009, at 5:09 PM, yaldezian wrote:

    Anders, you are entitled to your opinion. TIBCO is a good company with good stuff. But, as an Oracle for the software industry...ha,ha,ha...in fact it almost sounds like Vivik was saying, IBM please buy me!

  • Report this Comment On April 27, 2009, at 7:08 PM, keilw wrote:

    I agree, both IBM and SAP get some tough competion by that.

    However, SAP while a relatively active user of Eclipse technology has never been very productive in the JCP as far as I know it. And currently EC member (like SAP too btw ;-) I can only see them attend, usually vote, but only contribute little otherwise. They sure may be in some expert groups, but unlike other companies and groups like Sun, Oracle (before also BEA separately), Red Hat, Google or the Apache Foundation they don't normally stand out as Spec Leads or otherwise.

    TIBCO is a kind of vulture claiming to do big on Ajax, but unlike Oracle or others they never contributed any of it to a relevant standard body.

    I'd rather see Vivek Ranadivé's worries and blogs as clear indicator of jealosy and a "Why the Hell didn't they buy US for 1/3 or less of Sun's price" symptom.

    I remember a qualified list a little while ago, I think by a bank or industry analyst. And while banks may have failed in their predictions elsewhere, that contained a couple of companies sooner or later to be purchased.

    BEA was I think still high on that list, Sun too and yes, obviously TIBCO. Nortel I don't remember, but their Chapter 11 state makes them either go totally busted or finally get purchased by some vendor. IBM, Cisco, HP, even Oracle may find a few pennies left. After all they even recovered from the 10 Bio. BEA takeover to buy Sun for roughly 2/3 of it.

    Good Luck Vivek, if you survive it, one of those may buy parts of TIBCO, but the Portal will certainly get trashed soon (for good reasons ;-)

  • Report this Comment On April 27, 2009, at 7:18 PM, keilw wrote:

    Btw, he also has little more clue about SAP's software than his own or how to use Java properly ;-)

    Yes, parts of SAP's newer IDE and Frameworks are built on Java, but most of their legacy "crap" still largely relies on some C/C++, Assembler or Basic dialects. Including SAP's own Abab Basic or whatever it's called...

    Eclipse even if Oracle decided to disintegrate Java Communities like JCP has its own rather powerful community. Many use it, some contribute, others (take Google or SAP, beside a few other commercial vendors) prefer to take the cherries and usually don't contribute much back. At least not so far, despite e.g. Google's Android development mostly being Open Source, too.

    Oracle may sooner or later dismantle or fully destroy NetBeans. At least some top level Enterprise Exec denied any plans to use it in the near future. Parts may improve JDeveloper here and there, but the majority of it may have a rather unsecure future.

    MySQL or OpenOffice are not so much at risk. The Open Source versions usually would remain. Even if they decided to reduce support. And take examples like NeoOffice. Should Oracle really kill it, they would take over development, but that is not going to happen. OpenOffice has become a far too important weapon agains arch-rival Microsoft.

    And even SAP once used MySQL or had a cross-license deal called SAPDB. Not sure, what happened, but that or the underlying Oracle technologies like InnoDB or SleapyCat (both purchased prior to the "rest" of MySQL) may cost commmercial vendors like SAP. While the Open Source Community should not need to worry. Even Eclipse distros are still offered by Oracle, except at your own risk unlike times where WLW was commercially supported by BEA.

  • Report this Comment On April 29, 2009, at 4:49 PM, mixtliman wrote:

    Oracle, founded in 1977, market cap is $98B.

    Tibco, founded in 1985, market cap is $1.1B

    Who cares what Vivek thinks. Seriously.

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