"Well, somebody has to arrange the matches,
Young people can't decide these things themselves."
-- From "Matchmaker," by Sheldon Harnick, from the 1964 musical Fiddler on the Roof
Last year, Oracle (Nasdaq: ORCL) launched a lawsuit against German rival SAP Aktiengesellschaft (NYSE: SAP) in which it claimed unfair business practices and massive data theft. If you thought the rivalry had cooled down since then, you'd be sadly mistaken: Oracle is planning to amend that suit with some even juicier charges.
Oracle wants to add willful theft of company software to the list of SAP's supposed transgressions, and may implicate SAP executives in the case, because they might have known about the wrongdoings of a service subsidiary and done nothing to stop them. That's taking the fight to the next level -- now it's personal!
These two companies are so tightly intertwined on numerous levels that it's becoming difficult to tell them apart. Each sells support services for the other's products, and the SAP platform runs mainly on foundations of Oracle databases across the globe. They're not only battling each other in their respective quests for middleware dominance, but also facing serious common enemies like IBM (NYSE: IBM), TIBCO (Nasdaq: TIBX), and BEA Systems (Nasdaq: BEAS).
Oh, wait -- Oracle just bought BEA, removing one rival from the playing field. Hey, that gives me an idea! Why not get rid of the SAP rivalry the same way?
OK, so SAP's $62 billion market cap makes the company a much bigger buy than the $8.5 billion BEA tidbit, or the $10 billion that the company paid for PeopleSoft. But mergers and buyouts happen on this level as well, and across oceans, too; just look at the banking sector, or the bedroom eyes Microsoft (Nasdaq: MSFT) is flashing at Yahoo! (Nasdaq: YHOO).
I know it sounds crazy on the surface, but Oracle is an acquisitive business at heart. There are many millions, maybe even billions, of cost savings in cutting the fat where the twain overlap, and the combined user base would be a thing of worldwide beauty. Like I said, both companies already work with each other's products and customers, so the learning curve would not be steep. And these legal troubles would go away. Save on legal fees today, the mergers-and-acquisitions way.
"I promise you'll be happy,
And even if you're not,
There's more to life than that --
Don't ask me what."
-- Ibid.
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