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.
© 2009 UCLICK, L.L.C.
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