Oracle Gets Sleepy

The company buys a small open-source software firm.
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In what may be the first of a series of purchases,

Oracle

(ORCLSYMBOL)

has agreed to buy Sleepycat Software, a small, privately held provider of embedded open-source database software.

Terms of the deal were not disclosed in Tuesday's announcement, but the price was mostly likely below $10 million, said analyst Trip Chowdhry of FTN Midwest.

Oracle has publicly stated that it wishes to become a force in open-source software, and is thought by industry sources to be interested in buying

JBoss

, which has had some success in selling middleware that competes with

BEA Systems

(BEAS)

Oracle is also believed to be negotiating a deal with Zend, a Cupertino, Calif., software company that makes a popular software language called PHP, which is used on many Web sites.

Sleepycat's software is used to track data in various devices, including routers, says Chowdhry. Oracle last year purchased Innobase, which makes an add-on storage engine, a key component of open source databases sold by MySQL.

Although open-source software may be downloaded at no charge, companies like JBoss that distribute it charge for service and maintenance. Oracle CEO Larry Ellison says his company is moving toward "an all you can eat strategy" that emphasizes ongoing revenue streams, which are recognized ratably, rather than the more traditional license model, in which money is collected and recognized up front.

Shares of Oracle were recently off 12 cents, or 1%, to $12.37.

Oracle also announced Tuesday that it will sell its OnTarget sales force consultancy unit, which had been a part of Siebel Systems before the companies merged. Oracle said that despite its long history of "successful outcomes," the unit "is not core to Oracle's business strategy."