Oracle + Primavera
Where are the lucky couple registered?
Yesterday, Oracle announced that it would be purchasing Primavera.
Details of the transaction have not been made public. Already we see that Oracle has stated that Primavera management and employees will become part of a global business unit of Oracle. Given that so many Primavera employees work in the Primavera headquarters in Pennsylvania (thousands of miles from Oracle’s Redwood Shores, California, headquarters), this may be a good decision.
The sale of Primavera does not come as a big surprise. Primavera had sold a stake in the company to Francisco Partners a couple of years ago. Any time professional investors provide capital to a technology firm, one can bet that an exit strategy or liquidity event is being considered somewhere in the next few years.
Primavera has been around a long time. Their founder wrote an influential book on the concept of Earned Value and this concept has become an industry standard in the construction, engineering and government IT world. Several years ago, Primavera acquired Evolve, an Emeryville, California provider of high-end professional services automation (PSA) technology. Evolve had a blue chip client list and brought additional high-end capabilities into the Primavera product line. Since that acquisition, Primavera has made several small but very complementary acquisitions to further round out its professional services automation and Project Portfolio Management (PPM) product lines.
Does this deal make sense? I cannot render an opinion on the financial aspects of this deal because they are unknown at this time. However, this transaction brings a tremendous number of architectural, engineering, construction and professional services customers into the Oracle installation base. Many of these represent opportunities to cross sell Oracle's tools, database and applications.
Primavera also has a very loyal group of users who have consistently stayed with this product over the years. If Oracle does not: - dramatically increase product pricing or maintenance costs - kill off any of Primavera's product lines - force Primavera customers through an expensive Fusion or other upgrade then it should retain most of these customers.
Primavera competitors, such as Meridian Project Systems or CA Clarity, will obviously look at this as an opportunity to poach away Primavera customers and for that, Oracle needs to provide material assurances that prior investments in Primavera products will be protected.
This deal should be a good one for Oracle especially if it permits the Primavera personnel to upgrade the PPM solutions Oracle acquired from PeopleSoft several years ago.