Background
Over the past ten years or so, most enterprise resource planning (ERP) vendors have invested heavily in their product solution suites in order to extend their product portfolio beyond traditional integrated ERP components like financial accounting, human resources (HR), manufacturing resource planning, order management, inventory management, etc. Common application extension segments, generally built on the same technology platform as the ERP modules, include customer relationship management (CRM), supplier relationship management (SRM), supply chain management (SCM), and product lifecycle management (PLM).
At the ERP tier one level, which clearly includes SAP and Oracle, major efforts have been made to ward off the attempts of best-of-breed vendors to exploit revenue opportunities resulting from the gaps left by ERP. However, considerably different approaches have been taken by the two companies. SAP has taken the organic growth through internal development approach to application extensions, which can be time consuming and often results in a late-to-market outcry by clients in need. On the other hand, it often results in a product with the same look-touch-feel and process controls as the traditional ERP components and has better integration touch points. Oracle has taken a somewhat more risky and expensive "acquisition" approach for certain functional areas, as demonstrated by the acquisitions of Siebel for CRM, G-Log for multimodal transportation planning and execution, and Retek for unique retail applications and expertise. PLM, however, seems to be a more difficult puzzle for Oracle to solve. Internal development and commitment to the PLM solution set continues in earnest, while any speculation that their game plan may include a PLM acquisition alternative is just that, speculation.
The Oracle PLM suite is built on a single e-business suite data model and technology platform, providing for seamless process integration and business intelligence, which are two of Oracle's strengths among its general business applications. Oracle's PIM Data Hub extends the Oracle PLM solution to synchronize product data spread across diverse business entities. Oracle PLM also integrates with Oracle Content Services to provide for application-specific document and content management. Finally, Oracle PLM addresses most of the needs and nuances of NPDI and addresses all of the salient compliance issues for both discrete and process industries.
While the PLM suite outlined above seems relatively comprehensive, it has been brought together over time as a conglomeration of existing modules that were not necessarily developed with PLM in mind, although there was also considerable product development that did have a PLM focus. Given Oracle's legacy in database management, it is no surprise that the product data management, business intelligence, and decision support capabilities are the strongest parts of the PLM suite. These strengths, coupled with acquisitions for guided selling (Concentra in 1998) and CAD viewing technology (Assentive in 2001), and a heavy dose of integration work and internal development have helped bring Oracle PLM to the level where it is a viable solution for its installed base. In fact, the suite has several key high-technology clients, and really has gained momentum in other key Oracle verticals.
Given Oracle's rather low-key presence in PLM, an acquisition would certainly put them on the front page, and garner support for their PLM efforts going forward. In fact, some would argue that Oracle needs a significant and positive "booster" initiative on the PLM front, and that an intelligent acquisition could be the boost they need in order to be taken seriously outside of their immediate applications installed based. However, the current path of internal development with a focus on a PLM product enrichment roadmap may be the most logical course of action.