CEO Larry Ellison has been busy these past 18 months acquiring companies. Its acquisition targets include HR specialist PeopleSoft and CRM leader Siebel.
With its core business entrenched in database software, Oracle now wants a bigger slice of the lucrative applications pie. The company hopes that by doing so, it will offer customers an entire software stack--database, middleware and applications--and reduce their cost of otherwise integrating different pieces of their software architecture.
However, database remains the cash-cow of Oracle, contributing 80 percent to its revenues according to analysts. And in its most recent acquisition bid, the software heavyweight added to its fold Innobase Oy, a privately-held Finnish company with close ties to open-source database company MySQL.
Ellison recently told reporters during its OpenWorld conference that a shopping spree will help him achieve his US$30 billion revenue goal over the next few years, from US$15 billion now. To ensure that it is not a moving target, the company needs to maintain a 40 percent operating margin, which Ellison declared, is a "tricky" thing to do.
It's not just the leading companies like PeopleSoft and Siebel, which Oracle is eyeing. It has also set its sight on smaller niche players to boost its product line-up. Last month, it swept up G-Log, a maker of logistics and transportation management software. Oracle was also caught up in a bidding war with SAP for Retek, which it eventually won.
Contrary to skepticism that Oracle will be burdened by doubts over the future of its acquired products and employees, analysts say the company has actually done a good job in quelling uncertainties. It laid out a clear roadmap for PeopleSoft and JDE users, and announced a lifetime support program to assure customers that their current investments will be protected.