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Oracle Buys Oblix to Secure Web Services

UPDATED: Oracle acquired Oblix for an undisclosed sum, adding new single sign-on software to to offer secure Web services to corporations.

Oblix technology will also provide Oracle with a strong entry into the broad identity management software market, a multi-billion-dollar industry driven by the need for organizations to consolidate how they manage security across disparate applications and systems in an enterprise.

Thomas Kurian, senior vice president of Oracle server technologies, said on a conference call Oracle will create a specialized sales force to sell identity management software based on Oblix' sales expertise.

Though the Redwood Shores, Calif., company has made ID management software for its own products, it lacked the ability to shore up identity in applications from other companies.

No longer. Oblix provides software that allows access to corporate data to more than 200 customers, including Coca-Cola, American Airlines, Cisco Systems and General Motors.

Oracle will use Oblix technology to to enable secure single sign-on access among its newly acquired PeopleSoft applications for human resources as well as those of J.D. Edwards, Kurian said.

The software lets users tap Web services through networks from devices without having to enter all of their personal data each time.

Single sign-on is prized by analysts for its ability to enable compliance with increasingly demanding federal regulations for safeguarding sensitive personal and corporate information.

However, the purchase will help Oracle better compete with IBM , Computer Associates and BMC Software , all of which make or use some sort of single sign-on to allow customers to access distributed computing applications.

The deal could be especially painful for Microsoft, which had partners like eBay and Monster.com bail on its Passport single sign-on software in recent years. Microsoft had the closest relationship to Oblix, establishing an Identity and Access Management Solution Accelerator to help customers use Oblix NetPoint and Microsoft Identity Integration Server (MIIS).

Kurian said that 100 percent of Oblix' sales and engineering employees will join Oracle. Oblix CEO Gordon Eubanks will leave to pursue other interests.

Kurian promised that Oracle will improve COREid, SHAREid and COREsv ID management products, while still selling them as stand-alone products. Oblix technology will complement the identity and access management software available now in Oracle's identity management suite, which is part of Oracle Application Server 10g, he said.

ZapThink analyst Jason Bloomberg said Oblix was a solid company because of its ID and Web services management, which it picked up from its acquisition of Confluent Software a year ago. But Oblix never gained on companies like SOA Software and AmberPoint in the Web services management space.

Now Bloomberg is curious if Oracle will use Oblix to flesh out its service-oriented architecture (SOA) line.

"This move by Oracle begs the question: was there something wrong with Oblix' WSM capabilities, or does Oracle not understand how vital WSM is in an overall SOA product strategy?" Bloomberg said. "The jury is still out on whether Oracle can truly put together a coherent SOA strategy that will be competitive with the likes of IBM, BEA Systems and Microsoft."

Vendors who don't make it already are hungry for single sign-on and ID management.

Just last week, BMC acquired single sign-on supplier OpenNetworks for $18 million. Computer Associates agreed to buy ID management player Netegrity for $430 million. HP last year acquire identity management software maker TruLogica.

The buy is also the latest for a very acquisitive Oracle, which snatched Retek out of the hands of rival SAP AG last week and purchased PeopleSoft back in January.

Mike Singer contributed to this article.