Oracle Snaps Up Art Technology Group for £624 Million

Oracle is reaching for its cheque book again after it announced that it is acquiring Art Technology Group, which provides e-commerce software and on-demand applications, for $1 billion (£624 million).

In theory, the acquisition should expand Oracle’s abilities in online customer services, which in turn would complement the company’s existing CRM, ERP, retail and supply-chain offerings.

ATG’s assets include on-demand commerce-optimisation applications, such as live-help services and automated recommendations.

Unified Commerce

Oracle expects the deal to close by early 2011.

“Driven by the convergence of online and traditional commerce and the need to increase revenue and improve customer loyalty, organisations across many industries are looking for a unified commerce and CRM platform to provide a seamless experience across all commerce channels,” Thomas Kurian, executive vice president for Oracle Development, wrote in a 2 November statement. “Bringing together the complementary technologies and products from Oracle and ATG will enable the delivery of next-generation, unified cross-channel commerce and CRM.”

In its mission to become the largest and most mission-critical IT systems vendor in the world, Oracle has engaged in the regular acquisition of companies whose capabilities will allow it to build out its offerings – not only smaller startups, but also enormous firms like Sun Microsystems, which Oracle purchased for $7.4 billion (£4.6 billion). Oracle CEO Larry Ellison has discussed his company’s designs on melding software and hardware into “systems that can be the backbone of most enterprises around the world.”

That “complete stack” philosophy leads to products such as Fusion Middleware 11g, which offers IT administrators control over every level of their networks without the need to improvise a cobbled-together IT infrastructure. Oracle’s desire to expand itself into every IT-centric aspect of modern business, however, also gives it a variety of competitors across the spectrum, from Microsoft to IBM. The ATG acquisition, with its on-demand and customer-service focus, could be used to press Oracle’s competition with Salesforce.com.

Good Fit

“ATG has +1K enterprise customers worldwide, many of which overlap with Oracle, and its solutions are deployed by the highest number of large online retailers ([relative] to competitors,” Ross MacMillan, an analyst with Jefferies & Co., wrote in a co-authored 2 November research note. “As most of the retail spend these days remains focused on e-commerce, we believe at ATG’s assets fit nicely with Oracle’s portfolio of retail solutions.”

Meanwhile, Oracle also finds itself locked in a vicious courtroom battle with SAP, alleging that the latter’s TomorrowNow subsidiary stole its software documentation and confidential material. SAP acknowledges that illegal downloads took place via unauthorised access to an Oracle customer support website, but claims it never saw the actual data.

In a motion filed 22 October, SAP’s lawyers asked a federal judge for a gag order on Oracle. That didn’t seem to stop Ellison from accusing Leo Apotheker, SAP’s former CEO, of “overseeing an industrial espionage scheme centering on the repeated theft of massive amounts of Oracle’s software.” Apotheker is now CEO of Hewlett-Packard.