Oracle, Primavera and competitors in the PPM space

Let the sniping begin....

Since Oracle (ORCL) announced its intent to acquire Primavera on October 8, I have received a number of unsolicited comments and correspondence from Primavera competitors involving this deal.

After reading through these numerous documents, I decided to create a single list of issues being raised by Oracle competitors. Why is this list important? These issues will doubtlessly be surfaced the next several months by customers and prospects of Project Portfolio Management (PPM) solutions. These issues, in no particular order, include:

• Will this deal trigger a kill off of one or more existing application product lines (e.g., Primavera’s or Oracle Projects)? • Will Primavera customers be forced marched into some sort of Fusion upgrade? • Will the Primavera applications be integrated with the construction functionality in the acquired J.D. Edwards applications or acquired PeopleSoft applications or the Oracle Financials product line? • There are at least 3-4 different code bases (J.D. Edwards, PeopleSoft, E-Business Suite and Primavera) involved in the integration of Primavera and its product lines. Where will the synergy originate in all of this? Which products will integrate first, if at all? • How will an Oracle salesperson speak to a prospect? What products and integration story are they going to pitch and how? • Will the Primavera products go on life support? • Does Oracle still have the vertical industry talent it acquired with the construction sector applications of J.D. Edwards?

Since the acquisition has not been finalized, Oracle cannot discuss all of its post-merger integration strategies. To its credit, Oracle did produce a Frequently Asked Questions (FAQ) PDF involving this acquisition.

This paper, while more detailed than many merger announcement documents, does leave several questions open. In particular, Oracle discusses the creation of an Enterprise Project Portfolio Management suite (i.e., financials, HR, project accounting, project tracking, etc.). However, Oracle is ambiguous as to which of its myriad ERP product lines the newly acquired Primavera products will be integrated with.

To create this Enterprise PPM suite, Oracle may offer to connect Primavera solutions to all of its major ERP suites. The catalyst for such integration will no doubt be the Fusion architecture. If Oracle takes this route, you can expect competitors to loudly denounce this approach as Fusion has taken an extraordinarily long time to fully manifest itself. Just look what CIO Magazine had to say about Fusion recently:

The J.D. Edwards product line that PeopleSoft acquired just before Oracle announced its intent to acquire PeopleSoft would appear to be the most likely an immediate source of integration. J.D. Edwards had a robust business in the construction industry. Those customers would be ideal targets for cross-selling the Primavera product line. (Click here for more on enhancements to the J.D. Edwards products)

The Oracle Financials product line would seem to be the second most likely platform to develop the Enterprise PPM solution. This product line has had significant penetration in the midmarket and many larger enterprises. The PeopleSoft solutions set may be well suited for a number of verticals but to my knowledge, has never been a big player in the architectural, engineering and construction industries.

The discussion around fully integrated, enterprise, solutions for the construction vertical may be a very legitimate market concern. In an industry where many project management solutions were sold trailer to trailer on construction sites, construction, property management, engineering and other firms have awakened to the need for more enterprise level solutions in recent years. Construction and property management firms want to see project progress, maintenance activities and costs at an enterprise level. They want to better coordinate the utilization of key resources, be they people or equipment, across multiple projects. The scale of some construction efforts are so large and run for so many years that only a robust, well designed and integrated solution will suffice.

Litigation is also on the rise in the construction industry. To properly defend one self against spurious claims, construction firms and their subcontractors must keep meticulous records that document all aspects of a project including change orders, safety incidents, maintenance, etc. Again, islands of information will not suffice in the modern construction firm.

How will Oracle integrate Primavera? It's really too early to tell. Oracle must complete the transaction first. Until the deal is consummated, any discussion on this matter may be premature.

If your firm must buy a new Project Portfolio Management or PSA solution now, you might want to consider other options at least until the post-merger integration dust settles at Oracle. If you need a fully integrated (i.e., financials, human resources and project portfolio management) solution, also consider CMiC and Deltek. If you need to design, build and operate one or more facilities, then look at Meridian Systems. If you manage numerous internal projects (e.g., an IT department), then consider any number of PPM and PSA vendors such as OpenAir, QuickArrow, CA-Clarity and PlanView.

Prospects currently evaluating Primavera should take comfort knowing that Primavera is being acquired by a large, financially sound software firm. There should be no doubt that the various Primavera products will continue for some time and the decision to create an Oracle business unit around the project space is encouraging. Before you sign the contract though, make sure that you get the following as part of your new deal:

• Oracle does not get to raise your Primavera maintenance fees after the deal is approved. Make sure any deal he signed today survives the merger intact. • Should Oracle develop “similar” products to what you have licensed, your firm will be entitled to use any and all similar products at no additional charge and without any additional licensing requirement. This condition is important as the product you license today may become re-platformed or rebranded to a new name tomorrow. You should not have to pay twice for the same functionality. • Key Primavera personnel assisting you in your implementation will not be pulled and staffed on another Oracle or customer implementation. Some of the best and brightest within Primavera may be of interest to other parts of Oracle. Don't let your implementation suffer because of a preventable staffing situation. • Your firm should not have to pay for integration costs required to connect Primavera applications to any of the financial application product lines of Oracle. If Oracle is truly going to offer an Enterprise PPM solution, then any such solution should be fully integrated out-of-the-box. You should not have to pay for functionality that should be immediately forthcoming.

For more on Oracle's view see: http://www.oracle.com/us/corporate/press/017594_EN.doc

For a different perspective, see this from CMiC: http://www.cmic.ca/news_detail.asp?news_id=92