Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

2

Oracle Won't Let SAP Have the Last Laugh

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

"Anything you can do, I can do better."

That's what Oracle (Nasdaq: ORCL  ) is telling enterprise software rival SAP (NYSE: SAP  ) today by placing a firm $1.9 billion offer for Taleo (Nasdaq: TLEO  ) . In December, SAP announced a $3.4 billion tender offer for Taleo rival SuccessFactors (Nasdaq: SFSF  ) , which looks like a done deal assuming regulatory approvals.

SAP's move is seen as a direct attack on Oracle's cloud-based tools for human resources management. So the Californian empire strikes back. Taleo tucks right into Oracle's recently closed $1.5 billion acquisition of customer management expert RightNow Technologies. The rivalry between SAP and Oracle has made buyout bait out of pretty much any cloud-based business management expert you'd care to name.

Oracle is sticking with relatively cheap targets. RightNow went for 5.5 times forward sales, SuccessFactors is selling for eight times forward revenue, and Taleo's price tag amounts to roughly five times estimated 2012 sales.

With sales multiple standards like that, perhaps the buyout binge in cloud-computing enterprise software is coming to an end. The only obvious target left on the shooting range is LivePerson (Nasdaq: LPSN  ) , which would cost about $1 billion at these multiples. Bigger potential targets would put serious strain on even Oracle's bulging coffers.

There's no question that cloud-computing business tools are the way forward. Workers are getting mobile, and it's just not practical to install business tools on myriad laptops and smartphones when you can just make the same functionality easily available in a centralized model. That's why Oracle and SAP are investing billions in this space, and why the cloud model is making traditional software powers very nervous.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Oracle. Motley Fool newsletter services have recommended buying shares of LivePerson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1777600, ~/Articles/ArticleHandler.aspx, 2/26/2015 7:29:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Anders Bylund
TMFZahrim

Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.

Follow Anders:

Today's Market

updated Moments ago Sponsored by:
DOW 18,214.42 -10.15 -0.06%
S&P 500 2,110.74 -3.12 -0.15%
NASD 4,987.89 20.75 0.42%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

2/26/2015 4:02 PM
ORCL $43.89 Up +0.16 +0.37%
Oracle CAPS Rating: ****
TLEO.DL $0.00 Down +0.00 +0.00%
Taleo Corp CAPS Rating: *
LPSN $11.60 Up +0.20 +1.75%
LivePerson CAPS Rating: ****
SAP $69.85 Down -0.33 -0.47%
SAP AG (ADR) CAPS Rating: ****

Advertisement