Early in the life of Hewlett-Packard, an adviser warned co-founder Dave Packard that more companies die from indigestion than starvation. The message: Be careful how you handle acquisitions.

With CEO Mark Hurd’s announcement Tuesday that Hewlett-Packard (HPQ) will purchase services giant EDS (EDS) for $13.9 billion (including EDS’s cash and debt), Hurd is making a bold statement that his team is operationally strong enough to handle the heartburn.

If you thought open-source software was a threat to big-company profits, think again.

Oracle CEO Larry Ellison. Image: Oracle

Just a few years ago, the open-source software movement was a pariah among big software firms. Shai Agassi, then an executive at SAP (SAP), likened it to socialism. Microsoft CEO Steve Ballmer called it a cancer. The attitude among many in the establishment seemed to be that the “free code” revolution led by software such as Linux would discourage invention and erode profits.

That nightmare scenario hasn’t happened. Instead, the open-source movement has helped lower the cost of computing, and fueled a lot of moneymaking innovation, and not just among scrappy startups. For just one example, consider Oracle (ORCL), which is likely to highlight open-source trends as one of the growth drivers in its business when the company reports quarterly earnings today.

Oracle CEO Larry Ellison has put the pressure on BEA management. Photo: Oracle

BEA Systems rebuffed Oracle CEO Larry Ellison’s $6.66 billion hostile takeover bid by letting it expire on Sunday, but this game is far from over. BEA’s management now faces more pressure, not less, to sell the business software company.

That’s because the San Jose-based company has the tough task of convincing anxious shareholders that it really is worth $1.5 billion more than Ellison’s Oracle (ORCL) was willing to pay. It doesn’t help that BEA’s stock is now trading below the $17 per share that Oracle offered, and far below the $21 per share management insists it should fetch.

BEA (BEAS) executives might not have much time to prove the company’s value. Activist investor Carl Icahn, who had already bought a 13 percent stake in BEA to push for a sale, is threatening to lead a shareholder revolt against BEA’s management unless they auction the company off to the highest bidder – which, so far, had been Ellison. In a letter sent Friday, Icahn was particularly critical of the rough way BEA handled Ellison’s advances.

Oracle CEO Larry Ellison has emerged as perhaps the industry’s top merger mastermind.

You’d think Oracle (ORCL) CEO Larry Ellison makes crystal balls, not databases. Four years ago, the tycoon boldly declared that the business software market was on the brink of a buyout spree, and only a few mega-companies would survive.

Many wrote off that prophecy as mere bravado, but today things are happening just as Ellison predicted. And he’s not just sitting back and watching the action. Last week Oracle went public with its unsolicited $6.66 billion cash bid for rival BEA Systems (BEAS).

Ellison’s move will have a lasting impact because it is forcing competitors such as IBM (IBM), SAP (SAP) and Hewlett-Packard (HPQ) to consider making their own high-stakes bids for San Jose-based BEA, if only to keep its valuable customers out of Ellison’s hands. But outbidding Oracle also could be dangerous for them – a few industry watchers are whispering that Ellison might be happy if a rival gets stuck managing a time-consuming acquisition. (On Monday morning, Bloomberg reported that a spokesman says SAP won’t bid for BEA.)