Oracle Speaks on M&A, Is Microsoft Listening?
During the past week when the tech headlines seemed to be dominated by an increasingly hostile attempted takeover by Microsoft of Yahoo, someone at Tech Confidential did something clever - sat in and listened while Oracle executives talked at a conference about how to do smart takeovers.
Oracle pretty much wrote the book on hostile tech takeovers. Its efforts to swallow PeopleSoft is studied in business schools. Companies like Microsoft have shied away from them - they can cause valued talent to bolt, and integration issues can be sticky and long-lasting.
But Oracle is hardly shy. It has bought 41 companies in the past 45 months. Doug Kehring, an Oracle SVP in charge of corporate development, offers some lessons learned. For one, it doesn't work with bankers - it has a bank in house.
But Oracle, as we've noted, doesn't use bankers, not even for the contentious, $8.5 billion acquisition of BEA Systems Inc. in January. Instead it relies on co-presidents Chuck Phillips and Safra Katz, backed up by Kehring and a 16-person strategy and corp dev team. Chairman Larry Ellison has also been known to weigh in from time to time.Kehring also talked about the importance of communicating about deals in the media, a lesson that Microsoft is learning now. He noted that Microsoft has had different executives saying different things.
Oracle is similarly self-reliant on integration, trying a big consulting firm on the 2005 PeopleSoft integration but deciding to do things itself instead. Kehring says speed is paramount in Oracle's integrations, and that targets immediately adopt Oracle's back-office policies. "We're buying the go-to-market part of the business," he said.
In other words, Oracle is relentlessly focused - on strategy, on integration, on message. Microsoft wants to make a hostile bid without looking like a bully. In the M&A game, it can't have it both ways.