Oracle's acquisition program continued this week with its acquisition of Primavera, one of the leading providers of software for project management and project portfolio management. Primavera claims 5000 customers worldwide.
Primavera is fairly well known. Its project management offerings are often viewed as a higher end alternative to Microsoft Project. Though they certainly can be used in this way, as a standalone tool for managing individual projects or groups of projects sharing common resources, the value to Oracle goes far beyond this limited use.
Although Oracle does have some good project-based functionality in its E-Business Suite, addition of Primavera really bolsters its offerings. However, the value will not be fully realized until Oracle integrates Primavera with its core ERP products. Oracle's announcements
on the deal clearly show that this is the goal.
For organizations that are project-based, such as engineering and construction, public sector, aerospace and defense, and engineer-to-order (ETO) manufacturers, there is a great need to integrate project management with ERP. For example, for a true ETO manufacturer, the project schedule is (or should be) the master production schedule. Requirements for material, labor, outside services, and other resources are directly tied to the work breakdown structure. ERP systems based on a traditional MRP approach simply do not work.
Project-based organizations are relatively under-served by enterprise system vendors today, so Oracle no doubt sees a market opportunity. SAP has a strong presence in certain of these industries, such as energy and public utilities. IFS does a very good job in this sector as well, though its presence in Europe is greater than in the U.S. Baan used to be strong in this sector, though since its acquisition by SSA, and now Infor (renamed ERP LN), it is not being well represented. Other players, such as Glovia and Encompix (now owned by Consona), have the functionality but lack the scale.
So, the question is, how quickly will Oracle be able to fully integrate Primavera to work "seamlessly" with E-Business Suite? As noted recently, many vendor attempts to integrate disparate products wind up with a lot of seams
. Oracle has the resources to do it right, and hopefully it will. But don't expect it to happen overnight.
There's more information on Oracle's vision for Primavera
on Oracle's website.Vinnie Mirchandani
likes the deal.Brian Sommer
has a good post on the PM software space, what the deal might mean for Oracle, and for Primavera customers.
Update, Oct. 19. Brian Sommer
has an another excellent analysis of Oracle's acquisition of Primavera, the competitive landscape, and recommendations for organizations looking at a project portfolio management system these days. Related postsVendor ecosystems: less than meets the eye