Oracle Buys Financial Apps Maker Portal Software
The deal, expected to close in June, will give Oracle greater traction in the telecommunications and media industries, in which 20-year-old Portal Software specializes. Analysts said the acquisition continues Oracle's strategy to burrow more deeply into industry verticals.
"We view this deal as positive, given the highly fragmented and oftentimes proprietary focus of communications companies," sadi UBS analyst Heather Bellini in a research report. "We see this segment as looking more toward packaged apps in the future."
Portal Software's billing and revenue-management software can be integrated with a variety of ERP systems, and the company sells software for linking its applications with Siebel and SAP software. It doesn’t offer such a product for Oracle's applications, but Portal Software spokesman Kevin Payne said most of the company's customers are running Oracle software. Microsoft also is a close Portal Software partner.
Based in Cupertino, Calif., Portal Software has several hundred customers, including America Online, Vodafone, Reuters, Verizon and Sprint. The software maker primarily sells direct but has some VAR partners outside North America, Payne said. The company also has alliances with major systems integrators, such as Accenture, BearingPoint, CTC and Capgemini.
An Oracle spokeswoman declined to comment on whether the Redwood Shores, Calif.-based company plans to make Portal Software's technology available to Oracle's VAR channel. On a Web site about the acquisition deal, Oracle posted a presentation outlining expected partner benefits, such as a more complete applications suite for the communications sector.
In between expensive, splashy acquisitions such as ERP rivals PeopleSoft and Siebel, Oracle has focused on smaller deals to expand its footprint and product portfolio in key industries.
“Nearly all of the 'smaller' acquisitions, including ProfitLogic, i-flex and g-Log, support Oracle’s buildout of a vertical play," said Technology Business Research analyst Stuart Williams in a report. "As consolidation continues to sweep through the telecommunications industry, [we believe] this acquisition allows Oracle to increase its share of wallet among the remaining players and provide 'one throat to choke' for ROI-pressured CIOs."