Oracle Planning Reorganization in Application Group?
October 22, 2007 Timothy Prickett Morgan
The IT trade press is a-buzz about an impending reorganization at Oracle application group that may, in the wake of the company’s unsolicited $6.7 billion bid for middleware software maker BEA Systems two weeks ago, portend even bigger changes coming at the software giant.
Although reports in the Wall Street Journal last week said sources had confirmed the actions by Oracle, the rumors have not been confirmed by Oracle. Apparently, John Wookey, who is the senior vice president in charge of application development at Oracle, is going to leave the company. Wookey came to Oracle in 1995 from ERP software vendor Ross Systems (now known as Ross Enterprise and still providing ERP software after being acquired by ChinaDotCom in September 2003), and has been instrumental in Oracle’s delivery of its own Oracle Applications suite and has helped absorb the acquisitions of PeopleSoft, J.D. Edwards, and Siebel Systems, among others. Perhaps more importantly, Wookey has been spearheading the development of Oracle future Fusion Application suite, which is a set of Java-based applications that run on Oracle’s own Fusion Middleware and its databases (as well as other middleware and databases). Oracle has promised upgrade paths into Fusion Applications from all existing applications, which is a pretty tall order, considering the radical differences in code and interfaces between the various applications controlled by Oracle after so many acquisitions.
According to the report in the Journal, Charles Rozwat, who is executive vice president of Oracle server technologies, will be put in charge of all product development at Oracle. When Oracle says server technologies, it means Oracle databases and Oracle Application Server, the predecessor to Fusion Middleware. Rozwat has kept Oracle 8i, 9i, 10g, and 11g on track with an ever-increasing set of features and functions necessary in a distributed computing environment. Rozwat has been at Oracle since the company took over Digital Equipment’s RDB database in 1994, and worked at that company for 17 years prior to joining Oracle.
Thomas Kurian, who is a senior vice president of development of Fusion middleware and related development tools, will continue in that role while also assuming control of the development of the Fusion Applications. This seems like a pretty tall order, especially if Oracle prevails in its bid for BEA and Kurian gets stuck merging WebLogic and Fusion middleware in some way or just supporting two radically different middleware stacks. Edward Abbo, who was senior vice president of application development and who reported to Wookey after Oracle acquired Siebel (where he was chief technology officer), will apparently take command of development on all other existing applications, including the legacy Oracle, PeopleSoft, JDE, and Siebel suites.
No one seems to know why Wookey would be leaving, or where he plans to go. It does not seem to be related to the BEA bid, but it could be that Wookey thinks the BEA bid is a bad idea, even if it will bring Oracle to something close to parity, in terms of middleware sales, to IBM. It is possible that BEA WebLogic has something that Oracle needs to fulfill its vision of Fusion Applications and Fusion Middleware, but it is far more likely that Oracle just wants to keep BEA out of the hands of rivals IBM and Microsoft. Red Hat has had enough trouble absorbing JBoss that it is almost certainly not interested in BEA (and could not afford it anyway).
Hewlett-Packard, which is trying to play Switzerland in the middleware space, does not seem interested in buying BEA. But an argument could be made that HP wants to add value here. Of course, HP shut down its NetAction middleware product line in July 2002 after paying $470 million to acquire its creator, Bluestone Software, in October 2000. Once bitten, twice shy. And with BEA’s market capitalization at $7.2 billion–higher than the Oracle offer–as of last week, it is hard to argue that it is a good idea to shell out more than this to acquire a company with $1.4 billion in sales (fiscal 2007, ended January 2007) and maybe bringing 10 percent or 11 percent to the bottom line (it is hard to say, since BEA has not provided profit figures since last year as it undergoes an internal audit of stock option grants). HP could decide that it is better to sell WebLogic and its AquaLogic kicker to its vast installed base than to help IBM and Microsoft sell software. So HP could, as yet, step in. It seems iffy, to say the least. If Wookey ends up at HP, and HP buys BEA, it would be very funny, indeed.