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May 1
Oracle’s Project Fusion

This is my last post ( in a series of last 6 posts ) on Oracle Corp (ORCL), Red Hat (RHAT), and Novell (NOVL) : All eyes on Oracle’s next Acquisition, Red Hat hassles Oracle Corp's Boss, Oracle Corp Rethinking Alliance with Red Hat, Oracle Corp's interest in Novell, Is Oracle Corp. really interested in Novell?, and Why did Oracle Corp. talk about buying Novell?

Oracle Corp. in the past two years has spent close to US $ 19 billion in acquiring several firms to compete with one of its long-time top competitors, SAP AG www.sap.com, the German maker of Enterprise Resource Planning (ERP) software.

Oracle Corp. acquired People Soft (for about US $ 10 billion) and Siebel Systems Inc. (for about US $ 5.8 billion) in its quest to become a single vendor that would offer enterprises both Database and ERP software.

Successfully melding several firms and their software together is still the biggest challenge for Oracle Corp. (ORCL).

Oracle’s SVP in-charge of Applications, John Wookey according to BusinessWeek has been given one of the toughest jobs in the Silicon Valley -- the leadership role of helping develop a software suite codenamed “Project Fusion” that is expected to provide enterprises the “best of Oracle” in an integrated package. Fusion would help corporates run all operations -- from accounting and sales to customer relations and supply-chain management.

Integration fears about Oracle and the fear of several corporates about being forced to buy everything from a single vendor (Oracle) has prompted  SAP AG to run a vigorous campaign titled "Safe Passage" -- heavily promoted on its home page. The campaign states:

If Oracle's options have you worried, consider another option: SAP. SAP provides solutions, technology, and maintenance services, backed by more than 30 years of experience. Learn about the Safe Passage program.

The cost of failure in Project Fusion, and customer retention will be extremely high for Oracle Corp. The Novell talk by Ellison might just have been competitive posturing.


3 Comments/Trackbacks




Ujwal, what in your mind is the most useful lesson an everday Jo could take away from Oracle Corp at the moment? Thoughts?

Ellen,
Two things:
1)Acquisitions are tough to negotiate, harder to succeed with.
Oracle is in the middle of something important -- delivering on the promise of acquisitions of PeopleSoft etc. to take on SAP...Since SAP will not sit quiet -- Oracle will have to wait and consolidate its position before it tries more acquisitions.
2) Posturing is a useful way to avert possible Competition and/or buy time.
Oracle hasnt really acquired Novell -- which would be a distraction at this stage given (1) above. Yet, Red Hat knows that Oracle's response would be strong and painful if it tries to enter domains that Oracle considers its own (Databases http://www.thebizofcoding.com/2006/05/oracle_corp_rethinking_allianc.html ). This consideration might either deter or delay Red Hat untill it consolidates its own position in the Open Source market through alliances, and absorption of JBoss etc.
Hope you find this useful.

» Global Market for Databases -- IBM readies Viper to battle with Oracle Corp. from TheBizofCoding
The global market for Databases is US $ 14.6 billion according to the Red Herring Software Report of June 26. The Red Herring report also mentions an IDC statistic giving the Top 3 players in the Database Software Market as... [Read More]

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