Eight buying deals in one year, doesn’t this seem to be a little strenuous on a company’s budget? Well, this is not the case, if the company in question is Oracle Corporation (NASDAQ:ORCL). This morning, it came to light that the Redwood City, California based company had yet again pushed forward with another buying deal. This time it has settled for Xsigo, a cloud greasing company.
This company extends a solution that virtualizes key networking components, like switches and routers in attempts to maximize efficiency.
While the financial dynamics surrounding the deal have not been revealed, the deal represents Oracle’s desire to remain relevant in its space. Data handling is evolving by the second, and Oracle needs to find a way to keep up with the pace. What better way than to buy young promising companies, that are eager to make huge financial breakthroughs?
Interestingly, Oracle is not alone in buying. VMware, Inc. (NYSE:VMW), its close competitor, last week revealed a $1.26 billion deal to buy Nicira, a networking-software provider. The deal actually exclaims the technology suppliers’ growing interests in networking related companies.
In case you think the deals are over, think again. The deals are far from over and there is a very high possibility that either of the two, or another competitor all together, will top the headlines very soon for yet another buy. Technology supplying heavyweights currently have an inherent slant towards standout networking solutions; something that has created a bandwagon effect characterized by endless buying deals.
Why the need to buy new, emerging companies?
This is perhaps the question that underlies the whole scenario. Technology supplying companies are going through thick and thin, in their attempts to buy new companies and still maintain a positive outlook on their bottom lines. This demonstrates the importance on these companies to their activities.
Smaller companies extend innovation and a fresh set of ideas which are very important to technology suppliers. The corporate market is very dynamic, constantly changing form, depending on consumer needs. As such, if a technology supplier, for example Oracle, fails to have a host of ideas suited for different scenarios, it may very well bite the dust.
Oracle’s latest deal heightens the endless debate, rallied by shareholders, who argue that the company is more concerned about its interests than it is about shareholders. This deal represents director Mark .V Hurd’s consistent hard work ever since he joined Oracle in September 2010. Hurd was the former CEO at Hewlett-Packard Company (NYSE:HPQ), and he had resigned from the company, following HP’s allegations that he was secretly running a personal relationship on the company’s hard earned money.
