Oracle looks beyond acquisition
By Sidney Hill, Jr., executive editor -- Manufacturing Business Technology, 1/1/2005 12:00:00 AM
No matter what you think of Oracle CEO Larry Ellison, you have to admit the man has vision. For one, he was among the first to recognize the commercial potential of relational database technology, and he used that insight to build what is still the world's largest database company, becoming a multibillionaire in the process.
There was some debate as to whether Oracle or PeopleSoft was No. 2, behind SAP, in the enterprise software space. But that argument was quashed last month, when PeopleSoft's board of directors finally agreed to be acquired by Oracle.
By the way, a lot of people called Ellison crazy—or worse—when he first proposed that merger some 18 months ago. But Ellison, who for years has been saying there are too many technology vendors chasing too few customers, insisted the deal made good business sense. Now it seems the PeopleSoft board, and a majority of the company's shareholders, agree.
With this saga apparently on its way to closure, it could be said that there have been only two times when Ellison has been on the wrong side of a major industry trend. One was ignoring an employee's suggestion to develop an application to help manage customer relationships. That employee, Thomas Siebel, went on to found his own highly successful customer relationship management (CRM) software company. Ellison's other misread was his insistence that companies would want to run their entire businesses on a single software platform.
While these still seem like miscalculations at this point, Ellison would argue that time—and his latest vision—will prove him right in these instances. In fact, he said as much during his keynote address at Oracle OpenWorld, the company's annual user conference, which took place last month in San Francisco.
"The ideal situation for any business is to have all of its data in one place—consistent, updated information at your fingertips," Ellison said. "The Oracle E-Business Suite was supposed to solve the problem of data fragmentation" by allowing companies to run the whole business—and thus have all of their data—on a single platform.
But the Oracle E-Business Suite could not make it easy for companies to dump all of their existing systems. Thus, Ellison's latest vision—the data hub—was born. The data hub is a repository for specific types of data that can be linked to any applications that perform transactions with that data. Ellison calls this "the intermediate step" to his single-platform model.
He sees companies having a series of data hubs, but maintains that the "customer data hub is the most important."
"The customer data hub lets sales, manufacturing, and other teams operate more efficiently," Ellison said during his OpenWorld keynote, "because it has all of the information about a customer, and it operates in real time. That fulfills the promise of CRM, which doesn't know about late deliveries or late payments."
If the data hub doesn't fulfill CRM's promise, then Ellison could do what many industry observers are expecting him to do anyway, which is to buy Siebel Systems. Perhaps that will be less of a battle than the acquisition of PeopleSoft.
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