While it will take a while for the dust to settle on the announcement by Oracle that it is buying FatWire for an undisclosed sum, and longer to uncover what Oracle (news, site) plans to do with it, an initial analysis of products and goals suggests that the two should fit together well, even if there could be trouble ahead.
Financial details of the deal were not disclosed, and it’s unlikely that there will be an indication of costs in the Q4 results that will be announced late Thursday, but it’s certain that it wasn’t cheap, even for a company that paid US$ 1 billion last November for ATG.
Even at an elevated price, the long-term earnings prospects for FatWire products in an Oracle portfolio are good. The plan is to incorporate FatWire’s marketing campaigns software with Oracle’s CRM and e-commerce applications, and provide a unified web engagement software portfolio that will optimize multi-channel online customer experiences using an integrated and scalable platform.
The buy, Oracle says, is a response to the way web and newer communication channels are being used in the enterprises at the moment. As more companies use these channels do to business, the enterprises that supply communication, marketing, customer engagement and e-commerce applications to these channels need to change too.
Traditionally -- if you can talk "traditional" in web content management -- technologies focused on removing IT bottlenecks in web publishing and enabling content providers to carry out necessary tasks. Now, with more business being done online, web technologies are more focused on empowering web marketers and giving them tools to manage and optimize the online experience.
With all customer relationships based on the ability to send the right content to the right customer, sending a general email message in the hope of hitting a target is not working any more, and the tools that can provide personalized information are advanced at this stage.
Meanwhile, Oracle has a history of buying the technologies it hasn’t developed itself, and while it already has business intelligence, CRM and an e-commerce application from the ATG buy, even with WebCenter, it still need web engagement technologies, and FatWire (news, site) definitely fits that bill.
Oracle updated WebCenter this past January, finally pulling together and expanding on the capabilities offered from its BEA WebLogic (web server/portal) and Plumtree (Web CMS/Portal) acquisitions.
Oracle and FatWire combined capabilities
There's a certain amount of overlapping functionality between WebCenter and FatWire and you have to wonder what will be incorporated into WebCenter to further extend its capabilities.
The combined Oracle-FatWire solution, for its part, will help provide a 360-degree view of the customer relationship and a consistent user experience across all touch points and online channels, including in-store, online store, contact center and email will now be further extended to the web, mobile and social channels.
In the FatWire buy, then, we see Oracle’s response to the changing way businesses do business. To find and keep customers, businesses need integrated platforms with back-office and data integration.
The Oracle-FatWire relationship
With a combined FatWire-Oracle product, users can more easily modify site content and design, enable social interactivity, analyze and optimize content and create customer profiles to deliver targeted messages across online touch points. Generally speaking, they will be able to:
- Gain access to and use customer information from channels and systems
- Manage interactions across channels
- Unify commerce, merchandising, marketing and service across channels
- Provide personalized customer contact across channels
- Provide order and supply chain management and order fulfillment
Of course, the fact that FatWire has a significant customer base across web, mobile and social channels that Oracle operates in already, including financial services, healthcare, manufacturing and retail, probably helped too.
Oracle, FatWire Roadmap?
The question on a lot of people’s minds now, particularly FatWire customers, is where does it all go from here? Only Oracle really knows that, although there are some signs that, while Oracle will subsume both the staff and the product, until such a point as the deal is closed everything stays the same.
But the FatWire roadmap could undergo some considerable changes, as the first thing that is to happen will be a review of that. In one of the announcement documents Oracle released, it says:
Oracle is currently reviewing the existing FatWire product roadmap and will be providing guidance to customers in accordance with Oracle's standard product communication policies.
Any resulting features and timing of release of such features as determined by Oracle's review of FatWire’s product roadmap are at the sole discretion of Oracle. All product roadmap information, whether communicated by FatWire or by Oracle, does not represent a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision…”
In other words, with anything that currently exists on the FatWire roadmap, all bets are off, and anyone considering buying FatWire products at the moment should probably put their plans on hold.
However, that should not be taken as meaning FatWire products are going to be discontinued; it just looks like they might be developed differently through Oracle’s R&D department.
In fact, towards the end of the same document, it says research and development investments in FatWire’s solutions are expected to increase after the transaction closes, as they will then be able to share in Oracle’s R&D budget.
Apart from that, there is little indication of what will happen to FatWire when the deal closes. Oracle says that customers of both FatWire and Oracle should expect improved products, while FatWire partners look like they will be incorporated into the Oracle Partner Network.
Business is expected to continue as usual; training on FatWire products will continue, customers should still contact their FatWire support if they have problems and their sales representative will remain the same.
It is the absence of any indication from Oracle as to what is going to happen after that some may find worrying. There are two possibilities here: 1) Oracle has a clearly defined strategy, but it is just not telling 2) The acquisition was just a chance buy that came on the spur of the moment and didn’t leave time for Oracle to work it out.
It’s the first option that will cause concern and with Oracle’s history of acquisitions, it seems by far the most likely.
However, in the current market and given FatWire’s impressive record, it seems unlikely too that Oracle will waste the resources of a company like FatWire. Oracle is also under pressure in the web engagement market to play catch-up, which it might be able to do with FatWire, it doesn’t take too long to decide where it is going with it, and how it will it will incorporate it into its existing portfolio.