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Oracle Is Buying Endeca – Because It Wants To

Another acquisition in the search space generating noise as Oracle snaps up Endeca. As far back as 2008 I had written about Endeca and the potential for acquisition.  What amuses me most about this event is how quickly people assume this must be in response to the HP/Autonomy deal. After all – big search vendor gets acquired by bigger company with a broader portfolio. The problem is that these deals typically take longer than that to put together so assuming a direct cause and effect is a bit of a leap.

I question the relationship too because of the almost universal criticism that the HP deal drew. Not only was the price for Autonomy a bit ridiculous, the inarticulate delivery and ubiquitous “you want to do what?”  response to now pink-slipped HP CEO Apotheker would not necessarily create a run on search and analytics vendors in other board rooms.

The recent sniping between Oracle and Autonomy’s Mike Lynch adds fuel to the fire because clearly Oracle knew Autonomy was being shopped around. Just because someone else bit on a bad deal doesn’t mean Larry is going to respond by buying something better for less money though. Maybe – just maybe – this acquisition is just the next logical step in a strategy that has been evolving for the last several years. Oracle has acquired various bits and pieces of both the retail space over the last several years. Endeca has made a good name for itself in retail and combined with ATG it is good for the toolbox. Endeca is not however that transformative for Oracle. At least not anymore. If anything it is a pretty safe bet. They have established a presence in a tough market and I am certain they didn’t spend $11 billion for it.

If you are compelled to look for cause and effect – look in the reverse. Who is to say that the Apotheker strategy to go all in on enterprise software by making his first big bet on Autonomy was not itself a response to what he thought his predecessor and now Oracle badge wearing Mark Hurd wanted. Don’t forget the bad blood, lawsuits and billion dollar settlements between Oracle and SAP during Leo’s tenure there.

In this deal I believe Oracle made a rational and measured acquisition of a well-respected and positioned product in a space where they have strategy for expansion. Whether that space is retail or the more abstract unstructured data analytics, it is still additive and not disruptive to the themes that have guided their acquisitions.

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