CIMdata PLM Industry Summary Online Archive

3 February 2009

CIMdata News

Oracle’s Acquisition of Agile: A Status Update (CIMdata Commentary)

During a recent visit to Oracle’s home page (http://www.oracle.com) we were unable to find an obvious web link to PLM. Fortunately, with some intelligent digging, one can find a link at the bottom of the “Applications” column entitled “More Applications.” There it is, “Product Lifecycle Management,” right in between “Procurement” and “Project Portfolio Management.” This started us thinking … “How far and how integrated has Agile’s organization and PLM solution offerings progressed since Oracle acquired the Agile Software Corporation some eighteen months ago in July 2007?”

For Oracle, the Agile acquisition was fairly small in size from a financial prospective—the $492 million spent was relatively small compared to many of Oracle’s other acquisitions. At the time of the announced acquisition we commented that Oracle’s move was positive, that we believed it reflected a continuation of the consolidation activities that have been transforming the PLM market landscape, and that it reinforced the trend toward increased PLM focus from the major suppliers of ERP solutions. Today, we feel no differently, but the question is how has the acquisition of Agile changed things? Are Oracle customers benefiting from the acquisition? What about Agile’s pre-existing customers? Is it helping Oracle acquire new customers? Have they benefited from the acquisition (and how) or is it too early to tell?

In early discussions with Oracle regarding the Agile acquisition, Oracle’s objectives and plans for the Agile suite of products weren’t clear. Initially, CIMdata had the impression that Oracle did not fully realize that Prodika (now referred to as “Agile PLM for Process”) and Cimmetry (now referred to as “AutoVue Enterprise Visualization Solutions”) were extremely valuable solutions in their own right. Fortunately for Oracle and its installed-base, these product lines (along with the Agile PLM and “e” series solutions) continue to be supported on a consistent basis and our impression is that Oracle sees Agile’s entire product suite as valuable offerings within their overall suite of solutions.

For years, Agile was recognized in the PLM market for their solid focus on solutions for high-tech and medical device-focused businesses. Leading up to the acquisition, Agile did a good job strategically expanding their suite of offerings to include solutions focused on a few other industry sectors, especially the food and beverage industry and the general visualization market. It is good to see that Oracle has not buried these solutions by significantly changing their name or by hiding them from public view as some piece of middleware. Today, it is common to find Oracle’s sales team using Agile’s various solutions as differentiators in competitive situations with SAP and other enterprise software solution suppliers. This is a very positive development and one that we expect to be leveraged more broadly in the future, especially as Oracle continues to expand its PLM knowledge base throughout its global sales force. Oracle has initially targeted its PLM activities at the high-tech and food and beverage industries that were originally targeted by Agile; this makes good sense. However, we expect to see them expand their PLM focus to additional industries as they gain additional experience and continue to enhance their solutions.

In order to reinforce their overall use of PLM at the enterprise level, CIMdata would like to see a “PLM” link on Oracle’s home page (it should be noted that Agile customers also have access to another web site that contains a significant amount of Agile PLM-related information). This is not because we feel that PLM should be Oracle’s primary focus, but because PLM is clearly one of three or four major enterprise information technology initiatives seen in most industries today. The PLM capabilities provided through the Agile acquisition have extended Oracle’s enterprise solution capabilities significantly. It may not have provided as large a user base as a number of their other acquisitions have contributed, but it is expanding Oracle’s reach to new groups within an enterprise well beyond Oracle’s previous enterprise coverage.

For Agile’s previous customers and for existing Oracle customers, the acquisition appears to have already shown some measurable benefits. For example, it has resulted in the availability of considerably more resources being applied to Agile’s solutions, including both a significant number of additional development resources as well as expanded field sales and support capabilities. Importantly, it has given Agile’s solutions direct access to Oracle’s Fusion Middleware suite of technologies and capabilities.

Over the past eighteen months, Oracle has rapidly integrated Agile’s research and development staffs, as well as its sales force within the appropriate Oracle organizations. Additionally, since Agile is an Oracle Applications Unlimited Edge application, Agile customers are more confident that their investment in Agile solutions will continue to be supported. Agile customers have also begun to benefit from Oracle’s Fusion Middleware stack that includes business intelligence technologies, a capable application server, and of course, the Oracle database (e.g., Agile for Process now supports Oracle’s relational database management system, RDBMS).

It is clear that Oracle’s worldwide industry and market presence, and their business domain expertise in multiple industries provides a foundation that can be used to substantially increase Agile’s ability to expand their business and compete in the global PLM market. In addition, Oracle representatives have stated to CIMdata that its sales related to PLM have increased, and that PLM’s value to its customers and to Oracle is clear. Of course, Oracle has almost been forced to take this stand since SAP, its main competitor, and IFS have been promoting and delivering PLM-focused solutions for several years. It should also be mentioned that we have seen some sound evidence that Oracle’s sale force is promoting the PLM message, but we believe that more needs to be done. For example, Oracle’s existing customer base alone provides an enormous market opportunity for its PLM offering, which has yet to be fully leveraged. Regarding its overall market position, it is important to mention that with Agile’s acquisition, Oracle became one of the top five PLM Mindshare Leaders.

At the time of the announced acquisition, CIMdata commented that “…success for the Oracle-Agile team is not guaranteed.” We also commented that “there are serious questions about how the Agile software solutions will be melded into the Oracles suite of solutions.” It is taken some time, but we can now report that Oracle’s application acquisition strategy is clear. As with other Fusion Edge Applications, Agile’s various solutions will continue to be standalone products (i.e., solutions that can be sold separately or as part of an overall Oracle solution stack) that over time are slated to leverage more and more of Oracle’s Fusion Middleware stack, beyond just leveraging the Oracle’s RDBMS. One such area that should be highlighted is Oracle’s extensive business intelligence capabilities, which is also found in Oracle’s Fusion Middleware stack. Agile PLM customers can already leverage this functionality via the Agile PLM Data Mart and Oracle’s Business Intelligence Enterprise Edition. The capabilities provided are extensive and include interactive dashboards, ad-hoc query definition and analysis, intelligence alerts, online analytical processing and presentation, real-time predictive intelligence, disconnected analytics, and Microsoft Office integration, to name a few. CIMdata is happy to see Oracle make this capability available to Agile’s solutions and we expect this to bring significant value to companies who take advantage of it.

Another clear indication of Oracle’s integration intent regarding Agile’s solution was made more apparent this past September (2008), when Oracle announced the availability of the Agile Product Lifecycle Management (PLM) "Design to Release" Process Integration Pack. This PLM Integration Pack for the Oracle E-Business leverages Oracle Application Integration Architecture (AIA) to provide a pre-built, service oriented architecture (SOA)-based solution that has been designed to be extendable to customers’ current information technology set of solutions. According to Oracle, this pre-built integration for the design to release process integrates Agile Product Collaboration solution to Oracle Manufacturing and Oracle’s enterprise resource planning applications. This is intended to provide companies that use these solutions with a seamless process-oriented integration that is supported by Oracle. This Integration Pack, according to Oracle, is the first release of an ongoing roadmap to create a ”configurable, extensible, and sustainable platform” that will support enterprise PLM process integrations to Oracle Applications—as well as to third-party solutions. This is an excellent example of how the Agile solution set is being integrated into Oracle’s overall enterprise set of business process-oriented solutions.

At the time of the acquisition, CIMdata also pointed out that an additional challenge would be for Oracle to execute this acquisition without Agile disappearing into Oracle’s vast organization without a trace. We are happy to report that this has not happened. While not at the level we would like to see, visibility both internally as well as externally continues to grow. Overall, we believe that Oracle has recognized that the Agile organization brought with it a solid base of knowledge and domain expertise in PLM as well as a strong set of solutions that are enabling Oracle to expand its presence within customers and penetrate new industries.

Finally, it is still too early to place a final grade on Oracle’s ability to take full advantage of its acquisition of Agile. More work is yet to be accomplished, but Oracle appears to be on the right track and working aggressively to expand the use and capabilities of the Agile suite of solutions. On the client front, Agile continues to have a significant number of reference accounts and according to Oracle, more than fifty of them have recently verified previously-published Agile case studies and their associated findings. When it is all said and done, Oracle’s success in PLM will be dependent on their successful execution of embedding Agile’s domain expertise and solutions fully into Oracle’s organization and enterprise software solutions. Oracle is a major enterprise software solutions organization with the experience of a significant number of acquisitions behind them and we expect they will continue to expand their focus and solutions to support PLM.

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