Oracle announced today that it will be acquiring ATG for US$6.00 a share, or about $1B. This has been long rumored, as many in the industry saw this as a highly likely pairing. Not only are the solution sets very complementary, but this also allows each to address gaps in their solution portfolios. Oracle has had a significant hole in terms of eCommerce capability needed by its ERP, CRM, and supply chain clients. ATG has lacked enterprise order management and CRM capabilities required by its more sophisticated clients. Together these offerings will make a compelling pairing, though productization and packaging of the offering may remain a challenge for the near future.

Some additional thoughts:

  • Commerce is converging and client needs will span channels and capability. The trend of “dropping the e from eCommerce” is something we have been talking about for some time, as eCommerce solutions are leveraged not only on the Web but also in the call center, to drive mobile commerce, and increasingly in the store or branch. This is now becoming something our clients at Forrester are looking for in their next generation of commerce solutions. For Oracle this trend was beginning to present a threat as it lacked a capable B2C-oriented eCommerce platform. For ATG this represents a response to the moves IBM and GSI have made to develop cross-channel enterprise commerce solutions.
  • Don't worry that ATG will get buried in a bone yard. I expect ATG’s products to gain additional wind at their back while also focusing on their core differentiators of merchandising tools, commerce content capability, and driving relevance at the customer touchpoints. Oracle's acquisition can also clarify the answers to ATG's questions related to order management and supply chain requirements.
  • There is a significant overlap in customers, but integration of the product will remain tricky and possibly slow. Merging the products, sales forces, and road maps of large organizations is difficult. Many, many books have been written trying to help people get this right. For Oracle there are existing commerce solutions in iStore and Siebel, which need to be rationalized with ATG’s products. Oracle has had an IT orientation, selling into the technology teams and seeking to drive value to the CIO. ATG has had a largely business orientation seeking to drive the goals and objectives of the channel leaders and CMO, which has also led it to introduce on-demand hosted offerings. Determining how to combine and sell these products and normalize the cultural approaches may be very challenging.

As I learn more of the plans Oracle has for ATG, I will continue to communicate. If you have questions, post them below or use inquiry to set up a time to discuss what this means for your business.

Thanks, Brian