News that Oracle CEO Larry Ellison has finally made his play for BEA Systems on the same day that a new Linux patent suit has surfaced is the kind of double-barreled development that can make Fortune 1000 CIOs cringe.
Many of these enterprise software buyers already have to grit their teeth when they write checks to Oracle for database maintenance fees. The ROI on those payments, which take up a significant chunk of many an enterprise's budget, pales next to what corporations could be getting from business-optimization, virtualization or software-as-a-service offerings.
If Ellison can add BEA's middleware platform to his own dominant database, combined with the CRM he acquired with Seibel and PeopleSoft's ERP apps, he will extend and tighten his grip on the software stack. Combine that with Microsoft's dominance of desktop applications, and it's enough to give a CIO heartburn.
In the last few years, one of the few rays of hope for enterprises has been the development of Linux into a low-cost alternative for server software and some Office-like programs. While that's saved CIOs some money that would have gone to Microsoft, the march of the penguins in Oracle's territory has been slow indeed.
Many software buyers have been rooting for the RedHat - JBoss combination to succeed for this reason, but that company's results show that using JBoss's open-source middleware to penetrate the enterprise will be tough slogging. Now BEA, the leading independent middleware provider, may become part of Oracle. While that's not a certainty, given that BEA investor Carl Icahn is calling for an auction, the billionaire yachtsman has shown that he will do what it takes to acquire an asset he wants, as he did when he corralled PeopleSoft in a hostile action and again when he outbid German rival SAP for Retek.
Many CIOs who might consider an open-source alternative have been held back by the legal uncertainty over who owns the patents to such software. Novell innoculated itself from some strains of this affliction when it signed a deal with Microsoft under which Microsoft promised not to sue Novell customers for using open-source iteration that might contain some Microsoft code.
But now, just weeks after Novell finally put the long-running SCO Unix case to bed, Novell and RedHat find themselves on the receiving end of the first-ever patent-infringement suit involving the Linux operating system.
Unlike the SCO suit against Novell and IBM, this one was filed not an open source software firm but by a patent-buying and licensing firm. Still, Ellison, who one day last year torpedoed Red Hat's stock price by simply stating that Oracle might offer Linux support, has to be smiling.