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Oracle made yet another acquisition on Oct. 9, announcing it picked up LogicalApps, building out its already established Governance, Risk and Compliance line and marking what could be a new horizontal strategy in its acquisition spree.
LogicalApps, provider of automated GRC solutions, adds to Oracles GRC play culled not only from its own E-Business Suite, but also from the companys acquisition of PeopleSoft in 2005 and spreads it across departments, analysts said.
Oracles much vaunted acquisition spree that started with the hostile takeover of PeopleSoft has seen no end in sight. The company has acquired 35 companies in the ensuing two years—purchases that fall within distinct parameters, analysts said.
Ovum analyst David Bradshaw points out in an Oct. 10 research note that the LogicalApps acquisition is more of a horizontal purchase, with software functionality that could span various departments in an organization (though both Oracle and its major rival SAP are focusing on the Office of the chief financial officer with their respective GRC suites).
“LogicalApps is one of the stronger solutions on the market and there are a substantial number of customer implementations that include LogicalApps and Oracle E-Business Suite. As such, this is probably the right company for Oracle to acquire when increasing the strength of its GRC footprint,” Bradshaw wrote.
“It does, however, represent a diversion from Oracles previous M&A strategy and may just signal a fourth phase of acquisition strategy.”
Bradshaw outlines three distinct stages in Oracles acquisition strategy:
- Phase one was the acquisition of a substantial customer base with the addition of companies like PeopleSoft and Siebel Systems that, combined, added thousands of applications customers to Oracles bottom line.
- Phase two brought additions to Oracles middleware stack with technology purchases like HotSip, MetaSolv and Sigma Dynamics.
- Phase three brought Oracle down more of a vertical path, building industry specific capabilities with acquisitions like i-flex (banking), Retek (retail) and Netsure Telecom (telecommunications).
It remains to be seen if Oracle continues a horizontal acquisition strategy with additional purchases; with nine acquisitions under its belt this year alone Oracle does not appear to be slowing down its buy versus build strategy. In the meantime, Oracle has its hands full adding on to its GRC Application Suite, announced in March, that brings together functionality from Stellent (a 2006 acquisition), E-Business Suite and PeopleSoft Enterprise Suite.
The GRC Application Suite is built around three distinct layers: infrastructure, process and intelligence. The infrastructure layer includes security technology for things like identity management and data encryption. The process layer tracks mandates across an enterprise and across geographies. The intelligence layer is for risk assessment and reporting.
LogicalApps will add real time policy enforcement for business processes, Oracle officials said. The companys software provides automated application controls so that users can access, set up and monitor transactions with the goal of enforcing segregation of duties in applications.
Click here to read more about Oracles GRC suite.
“Regulatory compliance and the associated risk is a top priority for business executives today,” said Oracle President Charles Phillips, in a statement. “This acquisition underscores Oracles commitment to building a comprehensive, open and integrated CRC application suite.”
Oracle is not alone in its race to help CFOs better track regulatory requirements and mitigate risk. Archrival SAP jumped on the GRC bandwagon some time ago with the April 2006 acquisition of Virsa Systems—a company with which SAP had about 150 GRC customers in common.
The acquisition of Virsa put SAP in the lead—at least in the area of GRC, according to industry analyst Joshua Greenbaum. “GRC is really a big issue and no one tackles it quite the way SAP does,” said Greenbaum, principal of Enterprise Applications Consulting, in a March interview with eWEEK.
“SAP talks in terms of governance for risk. And theyre ahead. They made this investment in Versa a year ago, and have had a full year to really pull ahead, and they are sprinting with it, as opposed to Oracle who is just getting out of the blocks.”
Terms of the LogicalApps deal were undisclosed.
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