Oracle – Hunting high and low

February 9th, 2009 by Julia Lim

Strategic aquisition? Bargain hunt? Perhaps a bit of both.

Last week, Oracle announced they were buying mValent, self-described change and configuration automation vendor. They didn’t disclose what the purchase price was but over the past 5 years, mValent had raised more than $20 million in funding over three rounds. Reports vary on how much revenue the company actually brought in last year – from under $5 million to closer to $6.75 million – but perhaps the last straw was the fact that the kind of companies buying their $300K solution were financial services firms and Circuit City. Double whammy.

Hmm. I’m sure you’ve all seen those Circuit City liquidation sales going on. I wonder what will happen to all the enterprise software like mValent’s that the company bought? Can these be sold/transferred as well? Are they assets? For anyone looking for a second-hand app dependency mapping solution, maybe you can get one on the cheap…

Regardless, as Ellison said in a call with analysts in December, this is the time to look at acquiring small companies. Everyone’s valuation is down, and you have to believe that institutional investors are looking hard at non-profitable companies in their portfolio – which to sell and which to shut down.

Certainly what didn’t help mValent was the kind of product it sold. Application dependency mapping is a “higher-order” function, demands a premium price, and is most likely deployed with a CMDB. Regardless of the debate over whether or not companies are actually deploying “real” CMDBs, the trend in IT for a while now has been to focus on more immediate projects that show quick ROI or cost savings. Projects like ITIL and CMDB deployments while important to many organizations don’t make it onto the actual to-do list – especially now. So what is Oracle thinking? With a low enough purchase price, re-packaging of mValent’s technology with other small company buys and reach Oracle already has in the enterprise, what is a losing proposition for a little fry could show that ROI we’re all very aware of.

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Tagged with: application dependency mapping, Circuit City, CMDB, mValent, Oracle

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