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Oracle: Building a Bridge to Its Middleware

Analysis: Oracle's $440 million bid to acquire Stellent consummates the company's flirtation with enterprise content management and should further cement the software maker's foundation as a keeper of data for corporations.

Oracle  has been tinkering with content management for years. But only recently has the company begun to expand its offerings in the form of Content DB and Records DB, content services for storing and classifying spreadsheets, e-mail, and images.

As add-ons to Oracle Database Enterprise Edition, they hardly count as a full-on ECM system, said Melissa Webster, a program director for content and digital media technologies at research firm IDC.

[Those services] could not accelerate their ECM strategy enough," Webster said. Neither could Oracle optimize its partner strategy. It decided to buy its own content management platform.

The 451 Group Managing Analyst Nick Patience said Oracle will fill a large content management hole in its product portfolio, something he thought the company would do a few years ago.

"It's high time that Oracle bought its way into the market," Patience said.

Webster agreed, noting that acquiring Stellent will "turbo charge launch" the company into ECM, where it will have the software and services wherewithal to compete with IBM , EMC and Microsoft .

The market didn't always look like this. Until 2004, the ECM landscape was littered with standalone providers claiming best of breed. These included Documentum, Hummingbird, FileNet, Stellent (formerly IntraNet Solutions), Interwoven , Open Text and Vignette .

But a funny thing happened. Make that a few funny things.

EMC landed on its Documentum buy, broadening its ability to manage stored data.

This year, IBM grabbed FileNet and Open Text grappled with another equity firm for Hummingbird.

Webster said we can count on Microsoft to join the ECM table by 2007 with SharePoint services, which came from Microsoft Content Management Server software. SharePoint is lighter weight than a full ECM system, but it should still help Microsoft round out a powerful group for Oracle to compete against.

Out of remaining large players, Stellent looked like the best choice to Oracle, sporting a largely organically grown platform for document management, Web content management, information rights management, digital asset management and records retention management.

Not to mention applications that cover risk, discovery and compliance.

"It's a nice broad, complete ECM solution already well integrated with and ready to work on top of Oracle's database," Webster said.

Patience said The 451 Group thought Oracle would pick either Stellent or Vignette because, like Oracle those vendors' platform are based on the J2EE architecture.

These capabilities, which go far beyond Content DB and Records DB, could create a strong information bridge between Oracle's middleware and applications.

Stellent's ECM products can act as a data-driven glue for that cause, serving information to applications and middleware.

"This makes great sense as a strategy," Webster said. "They'll have a stronger platform for the next generation of content-enabled applications. The sky is the limit to what they could do to integrate ECM with their enterprise apps."

Like any acquisition, Stellent should come with a buyer beware caveat, the analysts said.

In Webster's view, Oracle still has to train its sales force on how to sell Stellent's ECM. Patience thinks that Oracle, with its proclivity for moving everything toward its database, will now need to reconcile yet another repository. "It's not a straight forward proposition."