Yesterday, SAP (NYSE:SAP) showed that it's not afraid to pay up for a deal, especially if it makes Oracle's (NASDAQ:ORCL) CEO, Larry Ellison, mad. Ellison isn't ashamed to admit he likes a good fight, and that's what he got after he launched his hostile bid for Retek -- after SAP had cinched a deal to buy the company. Yesterday, SAP floated an $11-per-share deal, a substantial increase from an agreed-upon price of $8.50 per share, only to be topped by Oracle's offer of $11.25 per share this morning.
Given Ellison's apparent zeal for hostile takeovers, it's fitting that he's a devotee of the ancient teachings of Sun Tzu, who wrote the classic on military strategy called The Art of War. It's too early to tell whether Ellison's strategy will succeed, but it's immediately evident that his move is time-consuming and expensive. After all, the PeopleSoft deal cost Ellison roughly $10.3 billion and was more than a year in the making.
True, the Retek deal would be small. But Retek is in a market -- software for the retail industry -- that appears poised for growth, and it has a premier customer base and strong domain expertise in the retail vertical.
But might the PeopleSoft and Retek deals be a signal of more serious strategic issues at Oracle? Is Oracle transforming itself because database products -- its core business -- are ripe for attack? The biggest threat in databases may be coming from smaller players attempting to offer improvements on products and the market niche currently occupied by the likes of Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM), and Oracle.
Take Day Software. This Swiss company has its roots in content-management software and realized that data is becoming much more "unstructured" (that is, containing multiple media sources - audio, Web video content, documents, and so on). In contrast, Oracle, IBM, and Microsoft products are designed to house and serve structured data.
Day believes that infrastructure software should be based on open standards, much akin to open-source operating systems such as Linux, which are impartial toward any one media form or software package. To that end, Day has developed a new standard in database and information management called JSR 170, which lets companies scale data- and content-management efforts using a single platform that can speak to multiple media sources and software types.
The end game? Traditional database players are certainly not dead, but their growth may well be. IBM has already announced its entire software stack will be JSR 170-compliant and spent $1.1 billion to purchase a leader in repository technology, Ascential Software (NASDAQ:ASCL).
If Day's hypothesis is right, open standards will pose a serious risk to Oracle's traditional core business, and that would validate Oracle's recent spree of acquisitions.
Fool contributor Tom Taulli does not own shares mentioned in this article.
