Will Oracle's New End-to-End Service Delivery Platform Actually Hurt Sales?

| About: Oracle Corporation (ORCL)
Convergence TechPlanet had a good story on some of the acquisitions Oracle (NASDAQ:ORCL) has made over the last year, how they are helping the company compete with archrival SAP (NYSE:SAP), and the potential risks.

We have already made our thoughts on Oracle’s acquisition strategy and SAP’s response clear. Here's what the article had to say:

With recent acquisitions like HotSip (a telco infrastructure software company looking at IMS), Net4Call (maker of Parlay/OSA delivery components, which supports legacy telco networks) and Portal (billing and revenue management solutions for telcos and media), Oracle is cobbling together an end-to-end service delivery platform [SDP] offering for telcos.

Besides these telco-specific acquisitions, Oracle claims it has a comprehensive offering, with much of the middleware stack (e.g. E-business suite), analytics (e.g. Siebel and Peoplesoft) and backend database (e.g. Oracle 10g) in place.

With 90% of telcos worldwide using either Oracle applications or infrastructure, Oracle already has an entrenched strength (compared to competitors like SAP), and they plan to capitalize on this lead.

Telcos buying into Oracle’s end-to-end SDP can reduce their IT spending by “up to 50 per cent over three years,” instead of telcos having to deal with “dozens of proprietary solutions”, said Lars Wahlstrom, VP of Telecoms, Media and Utilities at Oracle.

There are two potential problems with this strategy. First, telecom providers may prefer a best-of-breed solution rather than being locked into a single end-to-end solution, even at lower cost.

Second, Oracle relies on partners who also sell software that Oracle now competes with for their own sales. These partners may be reluctant to help their new rival.

The article continues:

“Many would-be database channel partners, especially enterprise applications software vendors, would prefer to see their software deployed on non-Oracle databases,” Current Analysis analyst James Kobielus said.

Would networking channels do the same for the middleware and database stacks?

ORCL 1-yr chart:

ORCL 1-yr