The Giant Acquisition Machine called Oracle is at it again. This time they spend another handsome $1B to acquire ATG Technology Group, a leading provider of eCommerce Software.
Oracle announced today that it has agreed to acquire Art Technology Group, Inc. (NASDAQ: ARTG), a leading provider of eCommerce software and related on demand commerce optimization applications, through a cash merger for $6.00 per share, or approximately $1.0 billion. ATG’s solutions enable enterprises to provide a cohesive online customer experience with sophisticated merchandising, marketing, content personalization, automated recommendations, and live-help services.
ATG’s eCommerce software platform is the industry’s top-ranked, cross-channel commerce solution and is highly complementary to Oracle’s CRM, ERP, Retail, and Supply Chain applications, as well as its portfolio of middleware and business intelligence technologies. ATG also offers on demand commerce optimization applications that provide companies with an online presence, the ability to improve customer satisfaction through immediate service response and automated recommendations.
Together Oracle and ATG expect to help businesses grow revenue, strengthen customer loyalty, improve brand value, achieve better operating results, and increase business agility across online and traditional commerce environments.
Not only are the solution sets are very complimentary, but it also allows each to address gaps in their solution portfolio. Oracle has had a significant hole in terms of eCommerce capability needed by their ERP, CRM, and supply chain clients. ATG has lacked enterprise order management and CRM capabilities required by their 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 they 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 ATG will get buried in a bone yard. I expect ATG’s products to gain additional wind at their back while also focusing on thier core differentiators of merchandising tools, commerce content capability, and driving relevance at the customer touch-points. Oracles 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, roadmaps 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 them to introduce on-demand hosted offerings. Determining how to combine and sell these products and normalize the cultural approaches may be very challenging.