Market Move - Oracle buys Datalogix - Moves more into DaaS

Market move – Oracle buys Datalogix - the next gen Apps view

This morning we learnt that Oracle has acquired Datalogix, the provider of consumer data that fuels marketing campaigns.

Instead of dissecting the press release in the usual ‘myPOV’ fashion, let’s take a step back and see what this means for the Oracle acquisition strategy, the evolution of enterprise software and next generation applications.

Here are some key data points to consider going forward:

• We are seeing the end of transactional applications - At this point large serial acquirers of enterprise software vendors like Oracle have no further attractive targets. Either from a valuation perspective (e.g. Salesforce.com), from a built in house and now good enough perspective (e.g. Workday) or a regulatory perspective – there are no more traditional enterprise software targets to acquire. So data service companies are a worthy target.

• There is more than software to subscribe to – Oracle, probably better than its key competitors, understands that future revenue streams do not have to come from software subscription revenues alone, but can come also from data service royalties. 

• Oracle is the only enterprise vendor serious on DaaS (so far) – Frankly I was surprised when Thomas Kurian positioned DaaS (Data as a Service) on equal footing with the usual three musketeers of the on demand world – IaaS, PaaS and SaaS. Back in spring 2014, more here. Datalogix is probably the largest acquisition that Oracle has made in the DaaS space.

• When DaaS meets SaaS $s are made – From the press release it is also clear, that Oracle really understands that a winning combination of DaaS and SaaS is what secures long lasting revenue screens, creates software users like and need (aka becomes ‘sticky’) and excludes the competition very effectively. 

• Oracle needs a BigData platform – The acquisitions of Micros and now Datalogix will stretch Oracle’s database capability in the BigData realm, but the vendor has the expertise and capital to address this. Let’s keep in mind we are talking about e.g. moving Datalogix data across many data center and possible even on premise installations (let’s not forget Oracle give the on premise install option for Fusion Applications).

MyPOV

A good move by Oracle, it now has added probably enough growth from acquisitions to make 2015 YoY comparisons favorable, even if it experience little organic growth. With financial analysts seldom making the ceteris paribus argument of how large both companies would be without an acquisition event, this is good news for Oracle.