The acquisition rampage continues as the software behemoth acquires a CIS vendor for an undisclosed sum; the CIS market is ripe for acquisition.
Posted Nov 6, 2006
Oracle continued its strategy of adding vertical capabilities to its product portfolio on Friday by acquiring SPL WorldGroup, an applications provider to the utilities sector. With the purchase Oracle aims to provide an end-to-end packaged revenue and ops management solution for organizations within the sector by integrating SPL's integrated customer care and tax management software into its own offerings. SPL's management team and 750 employees will form a dedicated utilities business unit within Oracle. Financial terms of the transaction were undisclosed.
SPL is best known for its integrated customer IS software for the utilities sector, which covers customer care and billing, asset and work management, meter data management, mobile workforce management, and outage and distribution. The company also provides tax management software for revenue and operations management solutions. Both types of software were of particular interest when Oracle considered purchasing SPL, says Paco Aubrejuan, vice president of Industries Strategy. "We already had a robust utilities offering, but we were missing the billing and mission critical applications," he says. "This acquisition addresses that."
The utilities vertical represents one of Oracle's biggest customer bases, with approximately 2,500 customers, according to Aubrejuan. Many of those utility customers already had a relationship with SPL thanks to the company's strong partnership with Siebel, which Oracle purchased in January. As a result, Oracle's acquisition of SPL "had plenty of synergies," says Guerry Waters, vice president of industry strategy and marketing at SPL.
Eventually, the SPL product line will be integrated with the rest of Oracle's CRM offerings via Fusion applications and middleware, Aubrejuan says. "The products will be integrated so the road maps of the customers and Oracle are synchronized."
SPL was part of the customer information systems (CIS) market, according to Datamonitor's Computerwire Web site; that market is estimated to contain some 200 vendors worldwide, primarily small ones. The CIS market in general has been flat for the past few years, seeing little growth. This, combined with a high level of fragmentation, makes the market ripe for consolidation, especially since CIS encompasses many aspects of operational CRM, making it an ideal vertical add-on for established horizontal CRM applications.
Oracle's latest acquisition and Gartner's assessment of SAP as a leader within the sector, suggests that this is another market where the two vendors are likely to go head to head, in addition to retail and banking, according to Datamonitor. As with these verticals, Oracle is gaining ground by buying its way into them, whereas SAP continues to rely on organic growth.
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