Merger with Oracle puts Enterprise PLM on the table
When Oracle announced its intent to buy Agile Software, the $495M all-cash merger seemingly opened a new front in the ERP wars, with industry analysts and stakeholders immediately wondering about the response of Oracle rival SAP. But the deal also represents the continuing evolution of the product life-cycle management (PLM) space, as manufacturers stand to benefit when product data can be easi...
When Oracle announced its intent to buy Agile Software , the $495M all-cash merger seemingly opened a new front in the ERP wars, with industry analysts and stakeholders immediately wondering about the response of Oracle rival SAP .
But the deal also represents the continuing evolution of the product life-cycle management (PLM) space, as manufacturers stand to benefit when product data can be easily shared across design and engineering departments; back-office, transactional systems of record; and supply chains.
“Oracle can now reshape the dialogue around PLM to go far beyond engineers and manufacturing people to include those in finance and purchasing roles,” says Agile CEO Jay Fulcher. “By becoming part of Oracle, we can accelerate the advance of Enterprise PLM.”
Agile has more than 1,200 PLM customers, and 2006 revenue of more than $130 million. The company's portfolio includes software for product development, data management, and quality management; as well as the Cimmetry collaborative visualization software used by 10,000 companies.
Agile is known for its strong value proposition and successful track record in high-tech and electronics, life sciences, industrial products, and consumer packaged goods. For example, Dell uses a global instance of Agile Product Collaboration to link 3,500 users and 150 suppliers in support of global new product development, while Tyco Healthcare uses Agile to coordinate design and engineering efforts and manage compliance documentation across seven sites in the U.S., Ireland, and Mexico.
Agile also offers solutions tailored to specific manufacturing sectors, like the Prodika PLM suite for the food & beverage industry. “Agile Prodika PLM has greatly improved our raw materials, supplier, and product intelligence,” says Deb Crosby, quality director of Pittsburgh-based H.J. Heinz Co. “Information that used to take weeks to gather is a natural extension of our day-to-day business processes.”
With the Agile purchase, Oracle strengthens its positions in these verticals, as well as in China and other Asian countries where Agile has expanded aggressively in the last few years.
“Customer focus continues to be on innovation—and even more important, profitable innovation,” says Steven Young, Agile Software's director of product marketing. “What this means in terms of PLM is a focus beyond product data management to include cross-functional process automation and decision support.
According to Boston-based AMR Research , the $8.10 price for each Agile share “seems like a great deal for shareholders.” Says AMR's Bruce Richardson, chief research officer, “Oracle is hoping to use Agile as a wedge into SAP strongholds.”
As is the case with other recent Oracle acquisitions, “A lot of CIOs are waking up to find that they are running a multi-vendor shop,” Richardson adds, evidenced by Oracle's purchase of performance management software provider Hyperion, customer relationship management vendor Siebel, and PeopleSoft, the human resources software company.
“Overall this a very good fit for both companies,” says Dick Slansky, senior analyst with Dedham, Mass.-based ARC Advisory Group . “Agile brings a comprehensive PLM solution set to the table for Oracle—something it needed to become a major player in the PLM sector. For Oracle, this acquisition should serve the midmarket as well.”