Purchasing the billing and revenue management solutions provider should strengthen Oracle's go to market offerings for the communications and media industry, and bolster its apps focus.
Posted Apr 12, 2006
Oracle's acquisition binge continued today when it announced its intent to bring communications and media specialist Portal Software under its umbrella through a cash tender offer for about $220 million, or $4.90 per share. Through the acquisition of Portal, which delivers billing and revenue management solutions to a client roster that includes Vodafone, AOL Time Warner, and Deutsche Telekom, Oracle expects to expand its applications drive into communications and media.
Portal offers as part of its arsenal a billing and revenue management solution with an object-oriented architecture built on Oracle that can bill and manage communications services including wireline, wireless, broadband, cable, VoIP, IPTV, music, and video.
"The combination of Oracle and Portal delivers the first end-to-end packaged enterprise software suite for the communications industry," writes Charles Phillips, Oracle president, in a statement. "We supply technology and applications to over 90 percent of communications companies worldwide today, and billing is a logical and complementary addition for those customers." Seventeen of the top-20 most profitable communications companies run Oracle applications, according to the enterprise software powerhouse.
"This is exactly the kind of combination our customers have been asking for," writes Dave Labuda, Portals president and CEO, in the statement. "Bringing together Oracle's leading ERP, CRM, and infrastructure software with Portal's global billing and revenue management into an integrated solution is a huge win for our customers."
In addition to its blockbuster acquisitions of PeopleSoft (which had acquired J.D. Edwards) and Siebel Systems, Oracle has snatched up a series of vertical-specific vendors including 360Commerce, ProfitLogic, and Retek--providers of software targeted at retail companies--and i-flex, a financial services specialist.
George Goodall, research analyst for Info-Tech Research Group, sees Oracle's plans to buy Portal as complementary to its acquisition of real-time data management software provider TimesTen, whose in-memory database is used in a variety of industries including communications. "When you look at high transaction volumes, typically generated by the financial industry and with telecommunications billing, often the standard relational database technology can't handle the volume," Goodall says. "So that's one of the reasons that they moved to acquire TimesTen, who really specialize in that. But if you look at Oracle's overall positioning, what they're really trying to do is offer more applications as a basis for the infrastructure offerings."
Some may argue that the acquisition is an attempt by Oracle to strengthen its competitive footing against communications giant Amdocs, but Goodall contends that the acquisition is consistent with Oracle's current strategy. "The overall trend is the acquisition of applications," he says. "They're out to take over as much as they can in [the] applications space."
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