It’s only been three weeks since Oracle Corp. completed its acquisition of ProfitLogic, and it will be another year before it merges its applications with those from recently-purchased
Retek to create a suite of packaged solutions for the retail industry.
However already Oracle executives are boasting that it can sell large retailers “revolutionary” out of the box applications.
“We can deliver something for major retail that is unprecedented,” Scott Friend, formerly ProfitLogic’s president and now vice-president of strategy and marketing for Oracle’s retail business unit, told reporters, industry analysts and customers Thursday at an update on the merger, which was broadcast via teleconference.
Along with Oracle back office retail middleware, the applications allow a retailer to manage business “the way a keen merchant prince may have enjoyed that kind of insight about their business in years past,” added Thomas Madigan, the unit’s North American vice-president.
Whether that’s so will depend on Oracle’s ability to execute its integration strategy, which is only weeks old. However, already on its plate is Project Fusion, the merger of Oracle’s eBusiness Suite with the applications it gained by buying PeopleSoft in January. That’s scheduled to take until 2008, although pieces will be delivered starting next year.
There were few details of how the integration strategy will be carried out at Thursday’s event, although Duncan Angove, general manager of the retail division, said swallowing Oracle’s third conquest of the year has gone swiftly. That includes retention of ProfitLogic’s support and sales staff.
“We were able to achieve the ProfitLogic one in weeks versus months,” said Angove. “We’ve really got this process down now in terms of knocking down these integrations.”
Retek’s software helps retailers manage sales and track financial and inventory data. Canadian customers include the Hudson’s Bay Company. It is sold and installed through large system integrators such as IBM, Accenture and BearingPoint.
ProfitLogic makes a markdown optimization for retailers. Customers include Canada’s Reitmans Ltd. women’s wear and Northern Group Retail casual wear chains. In Canada it’s sold and installed only through Karabus Management Inc. of Toronto.
Oracle’s swift acquisitions of the pair demonstrate the retail industry’s increasing interest in packaged solutions, said Jeff Roster, vice-president of Gartner’s retail industry market strategy research.
Most major retailers, such as Wal-Mart, have built their own applications, he said. But tailored solutions from companies such as Retek have caught up with corporate needs.
Oracle “is clearly going after functionality that retailers are already embracing to bring into (its) solutions suite.”
He added he “wouldn’t be surprised at all” to see competitors such as SAP, Microsoft and JDA buying other retail software specialists.
ProfitLogic’s acquisition by Oracle expands his company’s reach, Friend said Thursday. “What we were unable to do as a small company was expand beyond the core merchandising applications we were focused on at any kind of pace that would have an impact on major retail any time soon,” he said.
“We are now combining the analytics team at ProfitLogic and the analytic folks from Retek . . . and we are evaluating opportunities (for adding it) back into the supply chain and forward into the store.”
Madigan also said that Oracle will deliver “in 2006-2007” applications with the ability to track and measure RFID data from stores into a retailer’s supply chain as well as core merchandise system.
ProfitLogic and Retek applications will also be certified for Linux, Duncan also said, although he gave no date.
However, it isn’t clear if they will be linked in the near term to J.D. Edwards applications, which Oracle acquired with the PeopleSoft purchase. All Madigan would say is that it’s under consideration and will be based on customer demand. “We’ll be getting back to the marketplace shortly on that,” he added.
Under Project Fusion, JDE and PeopleSoft applications are being merged into a new Oracle eBusiness Suite.
Asked how Retek and ProfitLogic fit into Fusion, Angove noted that these products have no overlap with the other three. But the product roadmap calls for enabling them to run on Fusion’s middleware.
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