What has Oracle Gained with Endeca Acquisition?

November 17, 2011

Oracle has just acquired Endeca for the alleged price $1.1 billion. If accurate, Oracle paid a bit less for Endeca than Microsoft paid for Fast Search & Transfer and about 10 percent of the price tag for Autonomy. We wonder, is this a good thing for Oracle? For its customers? Jason Busch at Spend Matters believes the answer to both questions is “yes,” as he opines in “Procurement Acquisition Alert: What is Oracle Getting from Endeca? (Part 1).”

In fact, Busch lauds the deal as one of the “best enterprise analytics/applications/search deals in history.” Endeca’s Latitude solutions, he says, superbly complement Oracle’s product line. He also notes Latitude, aimed mostly at the manufacturing industry, currently has almost no direct competition. These are definite plusses for Oracle.

How will the acquisition benefit Oracle’s customers? Busch writes,

Endeca Latitude enables manufacturers to begin to not only discover insights and opportunities in their supply chain that usual spend analysis applications would miss, but to ask the all important question “why.” This is something nearly every other spend analysis or supply risk management application under the sun focuses on as an afterthought, at best. . . . Endeca can provide truly unprecedented views into not only how a supplier is performing (or may perform in the future) but how that performance is impacting other activities in the organization.

So far, so good. The article is the first in a series, so watch Spend Matters for further analysis. Our view on the billion dollar price tag? Happy quack for stakeholders and opportunities for Tier 2 search vendors to vie for the now vacant lockers once used by the graduating seniors of search. Harvest and upsell time for Oracle too.

We think the key acquisition for Oracle was its purchase of RightNow. CRM is a hot area for Oracle right now. Endeca may be a pawn move to counter Hewlett Packard’s purchase of Autonomy.

Cynthia Murrell November 17, 2011

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.