Opening the Checkbook



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October 1, 2005 —  (Page 1 of 2)
There were four corporate takeover announcements in September. Does this indicate a return to the go-go 1990s, and the era of unfettered mergers and acquisitions? No. These acquisitions tell separate stories and were all of companies that were ripe for the picking, and so it’s no surprise that someone picked them.

The two biggest recently announced acquisitions are Oracle’s takeover of Siebel Systems, and Access Company’s purchase of PalmSource.

Oracle’s announced US$5.85 billion acquisition of Siebel should not have been unexpected. For several years, Siebel has been on the ropes: its customers nervous and agitated about the complexity of the company’s CRM software, its executive suite in disarray, its stock price battered and defenseless. Meanwhile, Oracle was not yet sated after its hostile digestion of PeopleSoft at the end of last year, which itself snapped up JD Edwards, giving Oracle two product lines for the price of one.

What does Oracle get out of all this? Presumably, it’s not source code it’s after—but instead, an installed base of 4,000 enterprise customers and 3.4 million end users that will require support contracts, and that can be migrated over to Oracle’s own application. As Oracle president Charles Phillips said in a statement, “We will embrace Siebel’s best-in-class CRM products and make the features of those products the centerpiece of our Project Fusion CRM.”

It’s harder to predict the impact of Access Company’s planned purchase of PalmSource for US$324 million. The Japanese company’s CEO, Toru Arakawa, indicated that his primary interest in PalmSource wasn’t its core technology, Palm OS, but rather the market access provided by China MobileSoft, which PalmSource acquired late last year, and also China MobileSoft’s mLinux platform. Given that, it’s hard to see how this merger will be good news for PalmSource’s installed base of 39 million end users and 400,000 developers.

The other deals are smaller. JNetDirect, which historically has offered Java connectivity tools such as JDBC solutions but which also has moved into the business integration space, has snapped up Vanward Technologies, which offered a quality management dashboard and automated testing framework. This merger, whose terms were not disclosed, should be good news for all parties, since it rounds out JNetDirect’s product line and gives Vanward’s products a higher profile and more marketing horsepower.




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