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.
Lee Dallas
Marko Sillanpää
Received an email from an old friend who is an Endeca customer. I asked her what she thought about the deal. I thought her response was brilliant.
“I visited the Endeca headquarters in Cambridge a few years ago. The offices were filled with hip, intellectual and vibrant employees that created a work environment where innovative things happen…..Great company with new software technology matures then marries into money (old money). Eventually the new marriage and added responsibilities make company a dull boy.”
Excellent point about this not being a reaction to HP’s purchase of Autonomy. Neither was Microsoft’s chasing of the parent company for Hadoop and the earlier acquisition of FAST.
What I’m seeing is a recognition and maturation of Big Data in the Enterprise. Companies are seeing what Google, Facebook, Twitter, and Yahoo! are doing with the vast volumes of information which they are gathering. Your friend got it spot on by saying this is nothing more than Old money chasing (buying) into a new market.
This looks to be a continuation of the earlier purchases of ATG and FatWire where Oracle is looking to strengthen their SEO and App Platform/E-Comm capabilities. Endeca is a good fit with these and theoretically gives them a better offering than IBM and Microsoft in this space.
I’m curious to two points:
– What pieces Oracle will keep and what will be discarded and how long it will take until anything new happens. Acquisitions have a way of stalling things.
– What will Oracle’s next purchase be? Will they extend their CRM by buying a portal such as Box.net?
Hey Worthy
I don’t think Oracle will discard anything – I expect them to continue roughly on track but look for them to apply the engine to their big data development stream and integrate it into their eCommerce related packaging
As to what’s next – they already have 4 portals i think? though some now are well on the way to mothballs – should look that one up cause I lost count. As to buying someone in the CRM space they have already done that. Some of the more interesting companies in similar areas (like Workday) are unlikely because that mgmt team sold to Oracle already and started over.
Box as a crm or portal – interesting that I have never really thought of them that way but I can kind of see how you got there. Perhaps that is an evolutionary track for them to pursue 3-5 yrs out but right now they are really focused on expanding their total user count and lengthening the list of email domains for them to upsell basic file services to. rumor has it they just turned down a large buyout so I don’t think they are looking to cash out just yet.
BTW -sent you an email – did you get it? ping me if you didn’t
Didn’t get it. Also didn’t get a response from Word Press telling me there was an update.
I will reach out to you directly.