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Oracle Snags Primavera
The acquisition means a greater project portfolio management breadth for Big Red's enterprise PPM suite.
Posted Oct 10, 2008
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Oracle has added another notch to its acquisition belt -- number 47 since 2005, to be exact. The world's largest enterprise software company this week announced its acquisition of Primavera Systems, a provider of project portfolio management (PPM) solutions. Although this purchase isn't the heftiest of Oracle's recent buys, it exhibits the company's apparent intent of consolidation within the project services market -- and Big Red's outreach to verticals such as engineering, aerospace and defense, manufacturing, and professional services. Financial details of the deal were not disclosed.

Primavera, on its Web site, touts itself as the largest independent provider of collaborative project, resource, and portfolio management solutions. Primavera solutions focus on vertical industries including engineering and construction, public sector, aerospace and defense, utilities, oil and gas, manufacturing and high technology, and IT and services. A new Oracle global business unit will be headed by Primavera's current chief executive officer, Joel Koppelman.

Oracle already offers its own PPM suite, and Oracle and Primavera have been partners for years; however, analysts speculate that the acquisition represents Oracle's desire for best-of-breed and a reach into new verticals. "Certainly for Oracle, they tend to date a lot before they marry," says Rebecca Wettemann, vice president of research for Nucleus Research, on Oracle's acquisition strategy. "It's not surprising [for Oracle] to have a pretty good offering but look to acquire both technology and customers -- and smart people -- from a best-of-breed vendor," she adds.

The relationship between PPM and CRM isn't crystal clear, yet Wettemann notes that, with project-intensive industries, there remains a need for CRM and PPM integration -- and an overlap with the two markets. "The challenge has been with [having] two separate systems and separate applications," she says, adding that there hasn't been much automation or underlying software among industries with mission-critical needs. "With project management, there's still a gap in terms of software," she says, pointing out that a lot of project management is still being done within spreadsheets. "I think it goes very much to Oracle's vision of thinking about processes instead of products."

Wettemann says she sees the deal having particular importance for the JD Edwards enterprise applications that Oracle inherited as part of its PeopleSoft acquisition; however, the addition of Primavera also provides Oracle CRM with opportunities to explore new verticals -- and to upsell and cross-sell its suites. According to an Oracle press release, the intended Oracle-Primavera PPM solution promises to aid project-intensive companies in reducing costs, managing changes, meeting delivery dates, and making better decisions by use of real-time data.

"With Oracle's purchase of Primavera, you have a combination of a significant applications vendor combining with one of the top-four revenue-leading PPM players with many years of established reputation of significant user deployments in areas in IT project portfolio management, engineering and construction, professional services automation -- all of which resonate for Oracle's customer potential," points out Melinda Ballou, application life-cycle management program director for IDC. Ballou says she sees integration to be a bit worrisome, especially since Primavera has recently done some acquiring of its own -- Evolve Software in 2003, and ProSight and Pertmaster in 2006. "The challenge will be in integrating portfolios that, on both sides, have grown with acquisitions over the past several years," she says.

Wettemann, however, seems to think Oracle will fare just fine with its new purchase. "I think Oracle's track record has been pretty good both in terms of integrating...as well as being able to continue to innovate and develop and deliver new releases of what they buy."

The Primavera acquisition comes on the heels of Oracle's October 1st purchase (number 46 in the series) of Advanced Visual Technology, a provider of three-dimensional space-planning software. The project-intensive industry provider focuses on planning and designing of retail floor space, with the optimization of real-time, photo-realistic views of each store.

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