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Analyst: Former MS exec could lead Oracle acquisition spree

Oracle's hiring of a former Microsoft exec could signal that the company is planning for more acquisitions, according to one industry watcher.

With the hiring of former Microsoft chief technology officer Gregory Mattei, Oracle CEO Larry Ellison proved once again he's not into self-promotion or superfluous publicity stunts.

Oracle will likely continue to scour the market for additional acquisitions to help expand its position in markets and industries with significant growth potential.
Charles King,
principal analystPundit-IT Research

Boisterous he may be, but with the late June hiring of Mattei, who is also the former CEO of broadband provider 360networks, Ellison showed analysts it's going to be full speed ahead at Oracle for the time being.

In addition to his role as CFO, Maffei will have responsibility for Oracle's legal department, human resources, manufacturing and distribution, and global real estate. During his tenure at Microsoft, he oversaw its $35 billion cash and strategic investment portfolio.

Principal analyst for Pundit-IT Research Charles King, who is based in Hayward, California, said he believes the pick up of Mattei and his accumulated experience in strategic investment signals Oracle is still locked into a period of acquisition.

This belief is especially strong given the fact that Oracle still manages to sit on more than $7 billion in cash, even after the acquisition of PeopleSoft earlier, King said.

"Given SAP's increasing presence in the U.S. market, Oracle will likely continue to scour the market for additional acquisitions to help expand its position in markets and industries with significant growth potential," King said.

In King's opinion, the hiring or Mattei only solidifies his stance that Oracle is still patrolling the water for future acquisition targets.

"While the official press release extolled Maffei's credentials and previous experience, the concise discussion of his upcoming responsibilities resembled a haiku more than the typical epic executive poem," King said.

At the end of the day, one gains the sense that Ellison chooses executives more for their tactical business skills than their value as strategic company symbols, King said. In his view, Maffei's background as Microsoft's CFO likely provided the key to his hiring.

With that in mind, who better to hold the CFO reins than an executive with extensive cash management and strategic investment skills, King asked. Having executives like Mattei keeping the Oracle ship firmly on course leaves Ellison free to navigate the company toward its ultimate destination.

Noel Yuhanna, a senior analyst with Cambridge, Mass.-based Forrester Research, offered a dissenting opinion to King's when he talked with last week following the initial announcement from Oracle.

In an e-mail, Yuhanna cautioned that the media should not jump on the news as an indicator that Oracle was about to embark on a period of extreme acquisitions.

Said Yuhanna: "I do not think that [the Mattei hire] is a signal for more acquisitions, but it's more about putting [Oracle's] focus back in the growing [Database Management System] Windows market."

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