After making a variety of major acquisitions -- such as for Siebel and PeopleSoft -- Oracle
Let's start with the offense: Oracle agreed to purchase HotSip AB, a privately held company based in Stockholm, Sweden. The company develops carrier-grade applications that are based on IP (Internet protocol) networks. With this deal, Oracle can sell customers such things as secure instant messaging and conferencing. Many Oracle customers -- which have global operations -- see a need for such collaborative applications. To be sure, this doesn't necessarily represent an offensive in its truest form, since other competitors have already found a place at the table.
But in the scope of things, consider the means by which Oracle pursues its ends. To be sure, Oracle can build such technology -- but that would be time-consuming and would, in effect, introduce another player onto the market. Why not use its considerable resources to get into this market now?
OK, now a look at Oracle's defensive moves: This week, the company purchased Sleepycat, which develops an open source database product.
As the name implies, open source means that you can download the code of an application and make changes to it. In many cases, you can use the software without making any payments.
Of course, for a company like Oracle -- which charges its customers large sums for its software and keeps its code very private -- the open source movement is a threat. Why not buy the competition and control it? For example, last year, Oracle purchased Innobase, which develops open source applications for databases. There are also rumors that Oracle is in talks to purchase MySQL, which is a popular open source database that has customers such as Google
Critical to open source is having a strong community of supporters and developers, which can take many years to evolve. By purchasing a variety of companies in the open source ecosystem, Oracle can disrupt this delicate balance -- and, in the end, protect its huge database business.
Through acquisitions, Oracle is trying to adapt to the dynamic changes in enterprise software. It may have muted the open source community threat for now, but the company faces strong competition on the database market from IBM
Despite spending nearly $20 billion in acquisitions over the past few years, it is not impressing shareholders. Oracle's fierce competitor, SAP
Fool contributor Tom Taulli does not own shares mentioned in this article.