Oracle Acquisitions
Oracle’s at it again! This time they are buying Hyperion Solutions Corp. Hyperion is a company that makes a lot of tools used by SAP’s customers and SAP is a big competitor for Oracle. So this acquisition is, again, a direct attack against a competitor. SAP joins the company of RedHat and MySQL.
I don’t have any personal problem with Oracle’s actions. In the case of RedHat (with Unbreakable) I tend to think that it’s a move doomed to failure. The purchases of SleepyCat and Inno, two companies important to MySQL, could present some difficulties for that company. I don’t know enough about SAP to know whether or not this could hurt them. What I find interesting about all this activity is that Oracle is spending so much time and money not improving their own products. Managing and integrating these new ventures will take more money as well as some focus - focus and money that again could have gone into improving the product.
Much of the M&A activity I see, across industries, tends to be for things like needing to grow larger for the sake of being bigger, buying a company that has products/services that complement one’s own, directly buying an up and coming competitor to make sure it isn’t a competitor, etc… They tend to have some direct benefit (at least a perceived one) for the purchasing company. In this case, these companies are being bought simply to put the worry on other companies. In many ways I’m surprised I don’t see it more often, but I believe it’s a bit short sighted.
I think it shows a lack of confidence in one’s product to be better than one’s competitors. Rather than investing in making your product better or more compreshensive, you are investing in making life more difficult for your competitors. In some ways, it does the same thing, but I believe in the long run having a better product and a business that is focused on that product is a better proposition for the company as well as it’s customers and shareholders. I guess time will tell.
