Oracle Opens Portal to Communications
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UPDATED: Oracle continued its torrid shopping spree today, agreeing to buy Portal Software for $220 million in cash.
Portal makes a billing and revenue management system, built on Oracle's database software, that can manage wireline, wireless, broadband, cable, Voice over IP, IPTV, music and video services.
The company's average annual revenue ran in the $120 million to $140 million range, Portal spokesman Kevin Payne told internetnews.com.
"The combination of Oracle and Portal delivers the first end-to-end packaged enterprise software suite for the communications industry," said Oracle's President Charles Phillips.
"We supply technology and applications to over 90 percent of communications companies worldwide today, and billing is a logical and complementary addition for those customers."
With this acquisition, Oracle is building on strengths gained from earlier acquisitions to further develop its vertical market strategy.
"Oracle is bolstering its strong back-office presence in finance and HR applications, as well as its CRM capabilities from the Siebel acquisition, with complementary, industry-specific processes focused on core processes such as billing and revenue management," Paul Hamerman, vice president of enterprise applications at Forrester Research, told internetnews.com.
"This Portal acquisition is focused on telecom, where Oracle has a good applications presence, primarily from the PeopleSoft acquisition."
But while the deal is a step in the right direction, it still doesn't make Oracle the team to beat, said Joshua Greenbaum, principal analyst with Enterprise Applications Consulting.
"The acquisition doesn't provide the kind of functionality that turns Oracle into the undisputed market leader," he told internetnews.com.
But according to Greenbaum, observers and Wall Street analysts in particular have been waiting for Oracle to do something.
"The onus has been on Oracle to continue to fill out the vertical capability that it has promised to the market in the last two years," he said.
The company noted that this industry is, "a critical focus industry for Oracle."
And it may not be done shopping, a fact that may further reassure market watchers.
"The communications industry will continue to be a strategic industry for Oracle focus and investment," the company said in a document on its Web site.
Oracle also said that communications and media is the fourth largest industry in terms of software spend, and that billing and revenue management represents the largest area of customer investment.
Those activities are, "essential components of what those industries do in the back office," he said.
Key Portal customers include France Telecom, XM Satellite Radio and Vodafone.
Oracle said in a statement that several communications companies run its applications, or use its Database 10g and TimesTen database software. The company is also finding placement for its Fusion Middleware service-oriented architecture (SOA) at telcos.
Oracle said Portal's management and employees will form a global communications business unit within Oracle, concentrating on billing and revenue management.
Bhaskar Gorti, Portal's current senior vice president of worldwide sales, services and marketing, will lead the unit as general manager, and Dave Labuda will become the unit's CTO.
The bid for Portal is Oracle's latest move to get closer to market leader SAP on the applications front.
Oracle expects the transaction to close in June of this year, it said in a letter to customers distributed this morning.