August 11th, 2009
TIBCO and SAP: place your bets
Yesterday, Larry Dignan asked my opinion of persistent rumors that SAP is in the middle of taking a tilt at acquiring TIBCO. I rolled my digital eyeballs. How many times has this one gone around the block? As Brian Sommer yelled:
ONCE A POTENTIAL ACQUISITION IS PASSED ON, IT RARELY IS CONSIDERED AGAIN.
I’ve advanced the case both for and against such an acquisition. In 2007, I made an extensive case against such an acquisition based largely on the fact the company was in the throes of digesting its BusinessObjects acquisition and that it would be a significant cash drain. Earlier this year I tipped the other way for many of the technical reasons I thought right in 2007 but also noting Software AG as an alternative. As we now know, SAG has strengthened its game with its IDS Scheer acquisition. I also noted that TIBCO senior management told me they feel comfortable as ‘last man standing’ in the middleware game, especially as they’re in the middle of rolling out Silver to public beta.
Brian offers the view that SAP could take TIBCO out to prevent a competitor buying it but let’s look at the options:
IBM: already has a substantial and good business with WebSphere. The only reason to buy TIBCO is to acquire its arch enemy’s user base, let TIBCO wither and then migrate them to its own stack. IBM doesn’t need to do that.
Oracle: has its plate full trying to make Fusion Apps work and get them out the door - or some semblance of achieving that - in time for Oracle Open World. I can’t see it needing a TIBCO in the short term and in any event, to do so would be tantamount to a PR gaff given it has only just announced Fusion Middleware.
Microsoft: it has to go in the mix though I doubt Microsoft would know what to do with a middleware play if it came and smacked them in the face. It’s not called the joker in the pack for nothing (sic) although some might advance the cloud governance play as attractive.
…which only leaves SAP - if we’re being close to realistic. Infor doesn’t need it, neither does Lawson or any of the other tier two general business applications players. That’s not to say there isn’t room for either a private equity play or specialist buy. But then if I was in the Walldorf boardroom, I’d have my eye set firmly on what SAG is up to before making any decision.
As I’ve said before, one new attraction at TIBCO is Silver which provides SAP with instant credibility in the ‘cloud computing’ space if for no other reason than it fits well with solving the murky and as yet not well thought through issue of cloud governance. That is potentially an enormous space from which SAP could jump ahead in the PR stakes under Vishal Sikka’s leadership. We already know from conversations with Vishal that contrary to what the naysayers think, ‘cloud’ is very much on SAP’s mind. We all agree it sounds messy as currently articulated but that doesn’t stop Palo Alto and Walldorf from getting on with developing for the cloud across multiple domains.
Even so, IF SAP is to have a fresh tilt at TIBCO, then it needs to articulate the deal very carefully. There are still plenty out there who think this is a crock and in PR terms, the last thing SAP needs is to be seen as blowing $1.5bn plus on a defensive play.
As I said in the title to this post: place your bets; but please don’t look to me as the bookmaker.
Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.
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