Business & Technology Nexus

Dave Stephens on technology and business trends

Oracle Buyout Rumor Buoys Ariba’s Flatlined Stock Price

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Jason Busch over at spendmatters tucked a whopper into a seemingly innocent Friday-goodbye-post – that Oracle just might buy Ariba. And why not? Ariba’s priced at less than 2.5x revenues, even with its recent 2-day stock rise. (hmm.. rumor buyers beware, they’re not always true!)

The Oracle “standard issue acquisition plan” is to chop off G&A, cut combined R&D, and capitalize on new customer relationships to cross-sell and up-sell. Combine that “standard” plan with the added bonus of applying Freemarkets consulting expertise on Oracle’s much-bigger installed base to improve utilization, and off you go. There’s also the prospect of monetizing the Ariba Supplier Network more fully, although that really doesn’t fit into Oracle’s tried-and-true business model.

Well, fact or fiction, this rumor is pretty interesting. If true it sure would fit Oracle’s “let drain the swamp” pattern of buying any and every applications vendor out there “of sufficient size” to steal the mo’ from SAP. And the strategy, with Oracle stock up to over 19 bucks a share, sure seems to be working. Your move Walldorf.

-Dave

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Written by Dave Stephens

10/13/06 12:36 PM at 12:36 pm

Posted in Opinion, Procurement

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