Mergers & aquisitions

Database and application maker Oracle, having successfully acquired long-term target PeopleSoft in January 2005, has since moved onto to other, smaller, targets. Its management team have been particularly keen on acquisitions that boost its appeal to retailers: the March 2005 acquisition of Retek has now been followed with point-of-sale (POS) application maker 360commerce.

It is expected that 360Commerce will continue to operate as an autonomous unit within Oracle’s retail business. And while the technology helps to strengthen Oracle’s retail capabilities, the real benefit comes from the pent-up demand for POS systems replacement – analyst group AMR Research predicts that almost a third of US-based retailers will update POS systems this year. Oracle executives will be looking for opportunities for additional sales.

Like Oracle, Epicor Software has followed the acquisition of an ERP (enterprise resource planning) company – in its case, that of Scala Business Solutions – with deals for makers of retail software. Epicor bought CRS Retail Systems for $121 million in December 2005.

The UK-based Sage meanwhile has reached agreement to acquire Verus, a US-based merchant services company that processes and validates credit card and cheque payments for the small to medium-sized enterprise (SME) market. Sage hopes the acquisition will complement its existing US payroll services.

Computer giant IBM brokered by far the largest deal in January 2005, agreeing to acquire network management software vendor Micromuse for $865 million.

IBM will use the acquisition to strengthen the capabilities of its Tivoli NetView management software, bolstering that software’s ability to manage converged voice and data networks. The Micromuse software should also help to increase the scalability of Tivoli’s event management handling technology.

This will play an important role in combining business, security and infrastructure events that form a central tenet of IBM’s service-oriented architecture (SOA) strategy.

Separately, IBM acquired Bowstreet, a maker of portal-based tools. IBM is framing this acquisition as an important step towards maturing its SOA and composite application strategy: Bowstreet’s technology can be used to rapidly develop portal applications.

Meanwhile, integration application maker Progress Software announced a deal to acquire web service management tools maker Actional. Actional will be integrated into Progress’s Sonic division, which makes enterprise service bus (ESB) software – a core component of many SOA implementations. Progress Software hopes to position Sonic as a platform-independent SOA infrastructure software maker.

Progress also acquired Neon Systems, the mainframe application integration vendor, for $68 million in December 2005. It plans to merge Neon with its DataDirect operating business which focuses on standards-based connectivity.

Neon has concentrated on developing technology that can expose legacy mainframe applications as web services, and Progress will look to build on this as it attempts to position itself as a viable alternative to IBM.

“Given that the companies at the forefront of the SOA movement tend to be large enterprises, and most large enterprises have mainframes, this acquisition makes excellent sense,” says Philip Howard, director of research at analyst group Bloor Research.

Performance credentials

Industry bellwether Microsoft strengthened its ‘performance’ credentials by agreeing to acquire UMT, the project management software vendor. UMT, a long-term partner of Microsoft, makes software that helps users manage projects and portfolios. Microsoft will integrate the technology into its existing Office Enterprise Project Management suite. The terms of the deal, which is expected to close in early 2006, were not disclosed.

Microsoft is no doubt attracted by the value that organisations place on project management technology, says Dennis Gaughan, of AMR Research, which senior executives regard as a method of aligning their IT investment with business strategy.

The deal could reduce the cost of project management tools across the market, he adds: “Microsoft will stick to its volume pricing model and make the portfolio management tools from UMT available for attractive price points.”

Meanwhile, data warehousing giant, Teradata, agreed to acquire Decisionpoint Software (DPS), a maker of financial performance monitoring software.

Teradata will use the acquisition to improve its ability to analyse fast moving data, such as that generated within financial applications. DPS tools capture and move dynamic data from such systems into a data warehouse, updating analytic systems as required.

Teradata will incorporate the DPS technology into its products, improving its ability to analyse financial data from ERP applications, such as SAP’s R3 and, more pertinently, Oracle Financials – Teradata competes directly with Oracle in the data warehouse market.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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