Oracles Plans for Retail
Phillips said the company has been in discussions with Retek since last October and had planned to acquire the company at some point but became distracted with the PeopleSoft acquisition. Phillips said that Oracle views Reteks Merchandising System product as the crown jewel in the acquisition. That technology governs how retailers do markdowns, promotions and price changes, along with what they put on sale and how they arrange things in-store."If you have that, those decisions drive supply chain, inventory and planning needs," Phillips said. "Its fairly complicated stuff, because there are so many attributes to products. Retek built all that, and the key product is the Merchandising product."Oracle also would like to use Reteks software to link point-of-sales directly into its property management products. J.D. Edwards and Oracle have the No. 1 and No. 2 products on the market when it comes to property management, and Oracle sees great opportunity to jump into the historically underserved retail market. That point was underscored by Patrick Piccininno, the CIO and vice president of IT for IHOP Corp., which is an early adopter of Oracles Customer Data Hub technology and which uses various Oracle E-Business Suite modulesProperty Manager, Contracts, and Project Management and Project Collaborationto handle its 1,200 pancake restaurants and 400 franchisees. Piccininno told eWEEK.com that, going into the recent Customer Data Hub rollout, IHOP had no expectations that Oracleor any vendor, including Siebel Systems Inc.would have a vertical discipline focused on its business segment. "I do know, having spoken with my brethren in this space, other CIOs in this industry, one of the biggest reasons why companies like IHOP have not traditionally considered the Oracles and Siebels and SAPs of the world is because of some of these vertical requirements that cant be met by horizontal offerings," he said. "When I peeled back the onion enough, it was my opinion that [Oracles] breadth of solution outweighed its ability" to meet some of the specific requirements of the food retail industry. Piccininno added, "However, we did have to build some customization: utilization of flex fields, extensions to applications to help meet specific requirements we had that were not served by horizontal solutions. I would agree that it would be certainly advantageous for IHOP or other folks in hospitality or restaurants to have a vertical fit, and I would encourage them to spend more time with the Oracle team to let them understand how were using their tools." Retek qualifies as a minor acquisition for Oracle. Phillips said that Oracle "could do more acquisitions of this size," even though it has said it is out of the large-acquisition game for a few months. "Probably it will be the summer before we can do anything large, but this is not considered large," he said. Oracle has gone through a "fairly extensive exercise to determine what industries we want to invest more in," Phillips said. Phase One was to solidify its back-office applications, which it accomplished when it acquired PeopleSoft. Phase Two is drilling down in industries which meet certain requirements, such as being areas in which SAP is not strong. Retail fits that criteria, Phillips said: "Its kind of wide open." "SAP got their bid in first, but it didnt change the fact that we thought [Retek was] a great fit for us," he said. Check out eWEEK.coms for the latest database news, reviews and analysis.