On 23 June, Oracle announced that it was to acquire Skywire Software's application software business, with the deal expected to close in the second half of 2008. Until it does close, each company will continue to operate independently.
Skywire Software provides insurance software and document management business applications, and it is intended that the acquisition will strengthen Oracle's content management business. The insurance software helps insurers to manage the lifecycle of insurance policies including the policy creation, rating, insurance agent/broker management, and information exchange solutions.
The acquisition will provide major benefits for Oracle in two areas. First, it will strengthen the company's content management offering by providing both vertical and horizontal solutions that sit on top of the content management platform. This is an area that most of the leading enterprise content management vendors have been investing heavily in over the past two years, and it is providing one of the few differentiators between vendors.
The second benefit is that it is helping Oracle to build a comprehensive software suite for the insurance industry that includes Oracle's database and middleware for the technical infrastructure, Oracle applications to support the general business, and insurance-specific functionality, such as Oracle Billing, Siebel Claims, Siebel CRM, plus the Skywire Software solutions. In addition, Oracle is also acquiring AdminServer, which will further strengthen insurance policy lifecycle management.
Most ECM vendors now see a high proportion of their future revenues coming from solutions rather than the ECM platform itself, and any vendor that does not provide solutions is therefore at a disadvantage. Many of the vendors are associated with particular vertical markets with some vendors strong in the legal sector, while others have particular strengths in public sector, financial services, or pharmaceuticals.
The acquisition of Skywire Software will strengthen the Oracle Insurance Global Business Unit, and its 1450 insurance customers will grow Oracle's existing base of over 1000 insurers.
The acquisition will also expand Oracle's ECM offering by adding customer communication management and document automation capabilities, allowing Oracle to provide an end-to-end, multichannel content capability that can be used across multiple industries, including financial services, legal, and utilities.
Oracle also perceives the acquisition benefiting its partners by offering them extended content capabilities with Oracle ECM in order to build more extensive solutions using the additional functionality.
The acquisition will provide Oracle with a greater advantage over its nearest Enterprise Resource Management rival SAP. Although SAP does have tight integration with Open Text's ECM platform and its users can benefit from using Open Text solutions, there are advantages from buying a complete solution from a single vendor.
In order to remain competitive with Oracle and regain the initiative, SAP must now make a major investment in ECM. For its part, Oracle needs to continue to invest in solutions to build its capabilities in other vertical markets.