No sign of slowdown in Oracle’s buying spree

Acquisition target will become basis of new offering, says Phillips

Oracle is to acquire Agile Software, a PLM (product lifecycle management) solution provider.

The deal is being managed as a cash merger for $495 million (NZ$670 million) and is expected to close in July.

PLM software is designed to streamline the design, engineering, production, distribution and support of a product. Agile will serve as the foundation of an Oracle PLM offering, says Oracle president Charles Phillips.

Over the past several years, Agile products have played a pivotal role in giving companies the ability to monitor supplier products, both raw materials and finished goods, for compliance with environmental and food industry regulations in the US and European Union.

As compliance regulations become more closely intertwined with business strategy and regulations begin to touch all parts of an enterprise from ERP to CRM, industry analysts say it makes sense for Oracle to add PLM software to its suite of enterprise solutions.

Agile currently has 1,250 PLM customers.

The Agile deal is only the latest in a long string of acquisitions Oracle has made in the past few years. The company has bought large vendors, such as PeopleSoft, to increase its scale and its customer base. It has also acquired smaller companies that provide it with expertise in vertical markets, such as retail, or in specific technology areas, such as in-memory databases and identity management.

The Agile acquisition appears to fit into that latter category, providing PLM technology that can be used in a range of industries, including manufacturing, consumer goods, IT and life sciences.

Phillips says the Agile acquisition furthers Oracle’s strategy of offering a full range of enterprise software applications. In a dig at rival SAP, Phillips said the acquisition “allows us to offer yet another strategic application to SAP customers”.

Acquisitions have helped Oracle grow its share of the applications market against SAP and increase its economies of scale, its chief executive, Larry Ellison, has said. But the many buys have also presented the company with the challenge of integrating products, employees and business cultures into its fold. Oracle has embarked on Project Fusion, a scheme aimed at welding applications from acquisitions such as PeopleSoft and Siebel Systems into a new range of offerings. The first Project Fusion modules are scheduled for release later this year and the full suite is to become available in 2008.

SAP has tended to follow a different strategy, growing its business organically and making only strategic acquisitions that provide it with technology it cannot develop quickly itself. It has announced three acquisitions in the last two weeks, an unusually busy period for SAP.

They were MaxWare, which develops identity management software; Wincom Communications, which develops IP-based callcentre software, and OutlookSoft, which makes performance management software aimed at chief financial officers.

— Additional reporting by Robert Mullins and David Watson

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