Oracle Corp. (
recently announced that it is set to acquire privately-held
project portfolio management ("PPM") software developer
Instantis. However, terms of the acquisition were not disclosed.
The acquisition is expected to close by the end of this year.
Santa Clara, California-based Instantis develops PPM software
that helps IT departments, and product development and business
process teams to track the progress of their projects. Instantis
software can run both on-premise and on a cloud-based mode.
Lately, Oracle has been beefing up its presence in the rapidly
growing PPM software market. In July this year, Oracle acquired
Skire another PPM technology vendor. Oracle expects to integrate
Instantis and Skire with its fusion application portfolio that
includes its 2008 acquisition Primavera.
Instantis software follows a top-down approach, which helps
customers to gain complete visibility and control of their
projects. The simplicity of Instantis has attracted many big
names and the company has a significant clientele, which includes
Abbott Laboratories (
, Credit Suisse Group AG, and
Xerox Corp (
We believe that Instantis's strong customer base and steady
revenue stream will boost Oracle's market share and top-line
growth going forward. Moreover, the acquisition of Instantis will
help Oracle to increase its penetration into the portfolio
management market, in which
SAP AG (
has significant presence.
Oracle remains very active on the acquisition front and is
targeting companies that can be integrated within its existing or
new product lines. Oracle also acquires organizations with
competing technologies with the intention of eliminating rival
Over the last couple of years, Oracle has acquired a number of
companies including small start-ups as well as big players from
different fields (clinical trial to Data analytics) such as
SelectMinds and Taleo (human resource), RightNow (customer
relationship management), Endeca (unstructured data management,
web commerce and business intelligence), Vitrue (social
marketing), Xsigo (networking) to name a few.
We expect Oracle to continue to pursue strategic acquisitions
of small technology start-ups that are more likely to be easy to
integrate along its product lines, thereby helping it to expand
customer base over the long term. The strategic acquisitions are
also expected to provide Oracle a significant competitive edge
over its peers going forward.
However, Oracle faces significant integration risks due to the
rapid pace of acquisitions within a short span of time, in our
view. Moreover, stiff competition in most of the markets from
International Business Machines Corp. (
is expected to hurt its profitability going forward.
We remain Neutral on a long term basis (6-12 months).
Currently, Oracle has a Zacks #3 Rank, which implies a Hold
rating on a short-term basis.
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