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Analysis of Oracle’s Acquisition Strategy
March 17, 2008
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• Analysis by: GLG Expert Contributor
• Analysis of: Oracle sheds light on its acquisition strategy
• Published at: news.zdnet.co.uk
Summary
Since the beginning of 2007 to February of 2008, Oracle has acquired 40 different software companies. These companies include both large and smaller players, with the most recent, BEA, representing the largest acquisition in Oracle’s history at $8.5bn (US) dollars. Their acquisition strategy is further solidifying their market presence in the enterprise application segment in addition to building up both their sales and support staff. Though many of the acquisitions have focused on products that supplement other Oracle offerings, some have helped Oracle grow vertically by using acquired technology to enhance existing products. Oracle has developed a full software stack through both acquisitions and development that allows them to modularize their offerings to accommodate businesses of various sizes and technology platforms.
Analysis
If we examine past acquisitions by Oracle we can see that they are typically undertaken to:
· Increase market share. In areas where Oracle has been lagging behind in product offerings, or the growth was not matching that of the product leader they have used acquisitions as a way to quickly gain market share.
· Increase Sales and Support Capacity. One area that Oracle has seen numerous challenges in has been its sales and support arena. Typically most of the acquisitions have kept on the sales and support personnel to further strengthen their ability to compete in the marketplace.
· Gain revenue from loyal customer bases. Several acquisitions, such as that of PeopleSoft in 2005, brought to Oracle a very loyal customer base with steady maintenance and growth revenue....