Oracle Acquires ATG for $1 Billion
In a move designed to strengthen its e-commerce capabilities, Big Red spends big bucks.
Posted Nov 22, 2010
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With the holiday season approaching, e-commerce was likely to become a hot topic for many in the CRM industry. But with Oracle's recent acquisition of Art Technology Group (ATG), a provider of ecommerce software and related on demand commerce optimization applications, the conversation came sooner than anyone expected. The acquisition, which is considered by analysts to be a counter to IBM's recent development of ecommerce solutions, will cost Oracle $6 per ATG share (or roughly $1 billion).

"Organizations across many industries are looking for a unified commerce and CRM platform to provide a seamless experience across all commerce channels," said Thomas Kurian, executive vice president of Oracle Development, via company press release. "Bringing together the complementary technologies and products from Oracle and ATG will enable the delivery of next-generation, unified cross-channel commerce and CRM."

The acquisition will help both companies "grow revenue, strengthen customer loyalty, improve brand value, achieve better operating results, and increase business agility across online and traditional commerce environments," according to the press release.

Each of the analysts with whom CRM magazine spoke views the purchase as a positive for Oracle.

"Oracle may be looking down the road at a world that will be more dependent on e-commerce," writes Denis Pombriant, founder and principal analyst of Beagle Research Group, in a blogpost about the deal.

Pombriant speculates that increasing energy costs will cause consumers to travel less, which will in turn cause ecommerce solutions to grow in importance as online transactions become more frequent.

"Regardless of whether the transportation scenario plays out, it is a reasonable conclusion that if a vendor like Oracle can get behind a company like ATG, which offers lower cost ecommerce solutions, market demand for these solutions will expand because the lower price point brings out new demand," Pombriant wrote. 

"The solution sets [are] very complementary," blogged Brian Walker, principal analyst at Forrester Research, "but this also allows each to address gaps in their solution portfolios."

Walker contends that Oracle had a significant hole in terms of ecommerce capability needed by its enterprise resource planning, CRM, and supply chain clients, a hole which ATG will help fill. He also suggests that ATG has lacked the enterprise order management and CRM capabilities required by its more sophisticated clients, a function he predicts Oracle's technology will serve.

For Suresh Vittal, vice president and principal analyst at Forrester, the acquisition is evidence of a burgeoning trend in the technology industry. He claims the move is further evidence of the coming together of content, commerce, customers (CRM), and collaboration (workflow).

"This trend has been happening for a while," Vittal says. "Witness the web content management companies acquiring marketing capabilities, and commerce platforms adding content and customer management capabilities. This also feels like a clear counter move to the string of IBM acquisitions in the marketing, analytics, and business process management space."

(Editor's Note: Here are links to CRM magazine's coverage of IBM's most recent buys: Netezza, UnicaSterling CommerceCoremetricsInitiate SystemsSPSSCast Iron Solutions, and Datacap)

Walker, of Forrester, agrees. He claims the increasing importance of ecommerce was beginning to present a threat for Oracle as the company lacked a capable B2C-oriented ecommerce platform.

"For ATG," Walker blogged, "this represents a response to the moves IBM and GSI Commerce have made to develop cross-channel enterprise commerce solutions."

The transaction is subject to stockholder and regulatory approval and other customary closing conditions, according to the press release. The two companies are expected to close by early 2011.

Oracle would not comment on the acquisition.

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