In the latest step in its ambitious plan to roll up business-software makers, Oracle Corp. yesterday announced that it would acquire software maker Agile Software Corp. for about $495 million. Business software maker Oracle added yet another acquisition to gain a foothold in the product lifecycle management business. Oracle is planning to use Agile as the foundation for its product lifecycle management business. Agile, based in San Jose, develops software intended to manage a product’s lifecycle from concept and design to production, sales and service. PLM software promises manufacturers shorter time to market by way of process automation and efficiencies. But that promise has been slow to materialize yet.
With the recent acquisition of Agile, Oracle wants to fortify its presence in both supply chain management and enterprise resource planning. Jon Chorley, Vice President of supply chain execution at Oracle has said during an interview, ‘Agile offers a very strong product lifecycle management solution that companies can use to differentiate from competitors and properly and cost effectively innovate products’. He further added, ‘We believe the combination of Agile’s ability to do that together with Oracle enterprise applications is a great combination to differentiate Oracle from other companies.’
In fact, product lifecycle management has also become crucial as businesses increasingly tap contractors, both near shore and offshore, to manage product development and manufacturing. Agile has been immensely successful in high tech, life sciences, and consumer goods, which are perceived as three very essential industries to Oracle. The acquisition is expected to be completed in July.
Oracle contemplates to tap its recently announced Application Integration Architecture to bridge processes between Agile and Oracle’s disparate ERP suites. Even though since 40 percent of Agile’s customers already are Oracle customers (another estimated 50 percent are SAP customers) and many third-party-created integrations already exist. In addition to it, Oracle also planning to integrate Agile with its upcoming Fusion Applications suite scheduled for 2008, though Chorley is careful to distinguish between making Agile’s applications ‘Fusion-friendly’.
Market experts have remarked favorably on software maker Oracle Corp.’s acquisition of Agile Software. They have argued that Oracle will be able to offer a line of quality products and has not overpaid for the deal. Goldman Sachs analyst Sarah Friar has opined that the move was coherent with Oracle’s strategy of acquiring firms that expand its range of products, and at the same time allowing it to contest with SAP, Microsoft Corp. and International Business Machines Corp.
