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Why BEA Systems Should Sell Itself to AT&T

Nov. 01, 2007 8:26 AM ETBEA Systems Inc. (BEAS)2 Comments
Dana Gardner profile picture
Dana Gardner

While the potboiler of the Oracle (ORCL)-solicits-BEA Systems (BEAS) story simmers on the front burner, there could be another option for BEA’s board. Rather than BEA — which states it will be happily acquired for $21 per share — awaiting another software vendor to rescue it from the flinty grips of Oracle, why not seek out an entirely different sort of buyer?

A handful of the world’s largest telecommunications carriers, I should think, ought to give serious consideration to BEA’s plight. BEA would would do well to become the R&D arm, underlying infrastructure differentiator, integration hub, and sales/marketing channel lead into leading enterprise accounts for any carrier that needs to jump-start its business services offerings.

Now, I have suggested Microsoft (MSFT) might broaden its appeal to datacenter architects the world over by buying BEA, but Microsoft remains drunk on its growth potential as a Windows Everywhere vendor. And Microsoft would, seemingly, rather be late to the Web 2.0 bubble with a Facebook stake than late to the heterogeneous enterprise IT environment with a BEA-enabled segue to full IT and SOA solutions offerings.

Be that as it may, consider how a BEA would fit into a full-service telecommunications carrier’s dominion in this pending new world of services, SaaS, subscriptions and the need for technology differentiation as carriers increasingly find themselves competing against Google (GOOG), Apple (AAPL), Microsoft (MSFT), Salesforce.com (CRM), Yahoo! (YHOO), Amazon (AMZN) and eBay (EBAY).

Right. So if a Verizon (VZ), AT&T (T), Sprint (S), Deutsche Telekom (T), Orange (France Telekom), or other large carriers were to consider having BEA as part of their organization, what would they get? First, consider that carriers were behind a lot of purely technical advances in computing, with Unix, networks, patents, and R&D emanating from such places

This article was written by

Dana Gardner profile picture
Dana Gardner is president and principal analyst at Interarbor Solutions (www.interarbor-solutions.com), an enterprise IT analysis, market research, and consulting firm. Gardner, a leading identifier of software productivity trends and new IT business growth opportunities, honed his skills and refined his insights as an industry analyst, pundit, and news editor covering the emerging software development and enterprise infrastructure arenas for the last 18 years. You can follow him on Twitter at http://twitter.com/Dana_Gardner and on Friendfeed at http://friendfeed.com/danagardner. Gardner tracks and analyzes a critical set of enterprise software technologies and business development issues: SOA, cloud computing, Web services, application development tools, and application lifecycle optimization techniques. His specific interests include enterprise infrastructure and processes, developer tool advances and trends, business intelligence, complex event processing, business process management, virtualization, infrastructure outsourcing and utility usage trends, and open source development and deployment initiatives. As a software strategies blogger on ZDNet (http://blogs.zdnet.com/ Gardner) and BriefingsDirect (http://briefingsdirectblog.blogspot.com) and via a podcast series on BriefingsDirect (http://www.briefingsdirect.com), his analysis, commentary and interviews become conversational, and powerfully distributed via social networking and search. Gardner is a former senior analyst at Yankee Group, and a former editor-at-large and the founding online news editor at InfoWorld.com.

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Comments (2)

02 Nov. 2007
Very interesting. Considering BEA bought Tuxedo to start the company, and AT&T invented Tuxedo. That would be a 360. The only thing I can't see happening is because all the other Telcos also use BEA, so if AT&T acquires BEA, what would that mean to Verizon (VZ), Sprint (S), Deutsche Telekom (T), Orange (France Telekom), or other large carriers?
Dana Gardner profile picture
It would mean that IT again becomes a differentiator and competitive wedge for carriers. While IT didn't matter (thanks, Nick Carr) in the recent past, as we move to an Internet world and the back-end services are IT and the business model, then IT matters again. If all these bit-pipes use the same back-end IT, and they lose the content to Google's ad-revenue-sharing model, what do the carriers have left?
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