Oracle Buys Endeca: What it means

 

The eCommerce technology landscape continues to be reshaped in 2011. This morning the music stopped, and Endeca was sitting in the laps of Oracle, as they announced it has acquired the search, CXM, and BI* solution provider. This acquisition is a strong signal of Oracle’s focus on commerce and is a key piece in a larger puzzle.

Why did Oracle buy Endeca?

·         CXM. When Oracle bought Fatwire they cited the emerging CXM trend. But there was one problem, what was going to pull that all together with a strong, well-attributed, rich index of content, customer, and transactional data? Question answered as Endeca will fit in very nicely as a complement to ATG, Seibel, and Fatwire as a CXM solution to drive personalized, dynamic, contextual experiences across consumer/client touchpoints.

·         B2B. Endeca may be known as a search and guided navigation solution for B2C commerce sites, but it has a particularly strong value proposition for B2B companies with large complex product assortments – such as manufacturers and distributors across many industries. This acquisition will strengthen Oracle’s value proposition in B2B opportunities. Some may argue that search has been largely commoditized by Solr, but in these applications that is not yet the case. (That is evidenced by the combined success hybris and Endeca were enjoying together up to this point.) This acquisition will strengthen the Siebel, Oracle ERP, and ATG B2B offerings all together.

·         Portfolio. This solution will represent a strong complement to other Oracle enterprise solutions – from commerce platform, to content management, to CRM, to order management, to databases and business intelligence. While Endeca will be a premium on top of many other solutions in the portfolio, it will be the next logical conversation to illustrate how a client can get more out of the solution in a way that delivers value to the business and end user.

What does this mean for Endeca customers?

·         Clarity. For Endeca customers this acquisition should mean that Endeca’s schizophrenia between search and BI is resolved. For years Endeca has struggled to focus on how to leverage its core MDEX Engine technology between commerce, internal enterprise search, and BI applications. Even at events Endeca would host, there was often an awkward separation between business and IT leaders with very different product messages built off of one technology. Over the years the product investment and sales efforts would vacillate, often confusing the market along the way. With Oracle’s acquisition we can expect clearer focus as the underpinning technology is productized for both markets and we see clearer product roadmaps and productization strategies.

·         Stability. Endeca has been in an uncertain market position now for a number of years. Would they be acquired by IBM, Oracle, or even Amazon? Would they merge with or buy hybris? Would they go IPO? Now all that speculation can end. The focus can be back on the product and the value proposition can be clarified in combination with the other Oracle products.

·         Investment. For Oracle to realize the value in Endeca there will be investment required to flesh out the CXM capabilities as well as enable a highly integrated offering together with the other Oracle products. This will not be immediate, is complicated by the other recent Oracle acquisitions, and will take perhaps two years to execute. It will be important to observe how Oracle positions the Endeca product leadership teams, what they articulate as a product vision, and how that is manifested over the near and long term.

What does this mean for the broader market?

·         Oracle is serious about commerce. If their other acquisitions did not already make it clear, this acquisition signals that Oracle is in the commerce and content game to win. For Oracle this signals commerce and CXM are strategic focus and that they are aiming to drive a differentiated offering. The devil is in the details though, and how Oracle executes to drive value through the sum of the parts will be a huge challenge and leaves room. For Oracle’s key competitors in the commerce solutions market this adds a trump card they will need to respond to.

·         Queue Neil Sedaka - for the hybris and Endeca relationship, breaking up is hard to do. It seemed so promising - the prospective in-laws were pleased - but in the end it was not destined to be. The joint hybris and Endeca offering is a strong combination, and the companies worked together to build joint product and sales offerings which were performing well in the market. That began to erode some time ago, leading to the hybris acquisition of iCongo and Endeca pointed in another direction – right into the waiting arms of Oracle. (Expect hybris to be working the phones with Endeca sales people today.)

·         For the global commerce solution providers this is great news. The combined Oracle offerings will require the services of experienced, well resourced, strategic systems integrators and consultants to deliver value. The combined offerings will not see the benefits of product level integrations for some time, and SaaS offerings seem a ways off here as well. This will support continued growth of the partner ecosystem around Oracle’s commerce offerings, further fueling their presence in the market.

Next move? Oracle buys Heiler to improve the product content management and catalog management capabilities lacking in the portfolio and important to driving the value in the Endeca solution as well.

If you are a client and want to discuss what this means to you, I encourage you to set up an inquiry with us to discuss (though note that it may be awhile before we can schedule due to demand on the calendar).

*For more on what this means for the business intelligence solutions market, I recommend Boris Evelson’s blog post on what this acquisition means for Business Process professionals.

Comments

realizzazione ecommerce

Excellent tips. Really useful stuff .Never had an idea about this, will look for more of such informative posts from your side.. Good job...Keep it up

Pedantism ON!

complement, not compliment

:-)