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Opinion

Oracle to acquire Stellent: ECM market consolidation continues
Bharat Mistry By: Bharat Mistry, Associate Analyst - BCM, Bloor Research
Published: 21st November 2006
Copyright Bloor Research © 2006
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On 2nd November Oracle announced its intention to acquire Stellent, Inc. a provider of enterprise content management (ECM) software solutions, through a cash offer of approximately $440 million. The deal is expected to close by the end of the 2006 or early 2007. This announcement follows other recent major acquisitions of Filenet by IBM and Hummingbird by Opentext demonstrating the continuing consolidation of the Enterprise Content Management (ECM) software as IT infrastructure companies make inroads into the traditional ECM vendors' territory. Stellent was one of the potential targets that I predicted would be acquired in a recent article. (see IBM to acquire FileNet - a major shift in the ECM market.)

The infrastructure vendors see the ECM market as the next battle ground for growth fuelled by the rapid growth in unstructured data such as e-mail, voicemail, digital media, and a variety of business critical information. All this information is stored in disconnected silos such as mail systems, file and database servers and personal computers across the enterprise. This makes it difficult for organisations to make the best use of their information assets for competitive advantage. In addition, new compliance and regulatory requirements such as Sarbanes-Oxley now require organisations to archive and retain information for much longer than before.

Oracle has accelerated its content management strategy by this announcement and declared its intention not to be left behind in the market that has seen recent developments by other large vendors such as IBM, Microsoft and EMC.

Oracle's content management solution consists of Oracle Content Database which provides basic content services to store and centrally manage unstructured content in Oracle databases. It provides the content management infrastructure, repository services, search capabilities, security and application programming interfaces for application developments. The addition of Stellent's products will enhance Oracle's capabilities in document management, web content management, information rights management, digital asset management, records and retention management, imaging, and governance, risk and compliance areas.

The Oracle database is already used as Stellent's preferred metadata repository. Further integration of the products will enable Oracle to provide a more comprehensive and integrated information lifecycle capability and offer content management solutions that can scale to very large enterprises. Oracle effectively plans to inject a huge amount of R&D funds that will enable it to integrate the best of both company's technologies and create ECM solutions that will be able to compete with the larger ECM players. It will take advantage of the proven Oracle DBMS, with its enterprise level storage, security, search, backup and other infrastructure capabilities. Through its Fusion middleware tools it will offer content management capabilities to its business process management, business intelligence, portal and WebCenter tools. It will also provide better collaboration capabilities and provide content management capabilities for its ERP, CRM, Financial and other business applications.

The acquisition will benefit most customers too. Stellent customers will benefit from the greater resources of Oracle that will be used for product enhancements that Stellent on its own would not have been able to accomplish. They will also be able to access products that will be more tightly integrated with other Oracle technology and applications. Oracle's global presence will also allow Stellent products to be available in newer markets.

Oracle customers will benefit from the broader suite of ECM product capability that will now be available to them from a single supplier. Partner organisations will also benefit from access to a broader range of technologies to embed into solutions as well as broader range of specialist value added services to offer.

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