Saturday, November 04, 2006

Oracle acquires Stellent - On balance a good move

Oracle finally acquires an ECM company, after initially passing on Documentum & FileNet (now owned by EMC and IBM respectively). It’s a move that appears to make sense for a number of reasons not least because:

• Oracle is very keen to make headway in the ECM market and their own attempts to date have fallen short.

• Stellent is a well respected players and gives Oracle instant kudos, expertise and visibility in the ECM sector

• At a technical level Stellent is probably the easiest (in relative terms) of the remaining ECM systems in the market to integrate into the Oracle stack

But even if at this high level Stellent appears to be a good fit for Oracle, there is no guarantee that this will be plain sailing.

• For starters even though Stellent may be a key ECM player, they are not very well represented in large enterprises

• They are considerably smaller by any measure than Filenet (IBM), Documentum (EMC) or OpenText

• The corporate culture at Stellent embodies Minnesota nice, mid Western congeniality – Oracle can be brutal

• Stellent is big enough to make integration into Oracle a challenge, but not big enough to be seen by many key execs within Oracle as strategic

On balance Stellent seems like a good move for Oracle but it is not without its challenges. I suspect the Oracle Content DB will largely remain (selling multi thousand seat low price deployments) but the Stellent product set once integrated and rationalized will provide the heavier duty components to qualify Oracle in many competitive situations, and plug specialist gaps.

Though it will not close the gap between Oracle and EMC, IBM and OpenText it does steal a march on arch rivals SAP who’s attempts at ECM related activities have been tepid at best.

For buyers and users of Stellent technologies there should be little to worry about in the short to mid term, but new buyers will need to push Oracle sales staff for clear information on forward direction.

At this rate 2007 is gearing up to be the year of ECM – for with these acquisitions digested there will be a lot of new money for marketing and R&D being pumped in by the majors. Clearly there is now growing pressure for SAP to respond, and though most of the money is on them acquiring OpenText (read iXOS), the plethora of acquired technologies that make up OpenText may present a pandora’s box that historically conservative SAP may not be willing to open.

For maturity in ECM we are almost at 1.0 with the major players owning the vast majority of the market – what they will do, and they will do many things, is still open to debate but ECM 2.0 will emerge.

For a couple of other really good persepctives on this check out:

Ralph Gammon
Tony Byrne

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