Continuing its relentless streak of acquisitions in recent years, Oracle on Wednesday said it plans to buy Primavera Software, maker of project portfolio management (PPM) applications.
The deal is expected to close by the end of this year. Terms were not disclosed.
While large vendors like CA and IBM have offerings in the PPM arena, there are also a number of smaller vendors, such as Planview and Cardinis. As for Primavera, it "is the granddaddy of project management," said Forrester Research analyst Ray Wang. "Every major construction project, every major road project. ... This is like an industry standard."
Along with technology, Oracle stands to gain a significant customer base through the upcoming deal. Primavera's software is being used by 375 of the top 400 engineering companies and all five branches of the U.S. military, according to a statement.
There is ample money to be made in this space. The "project-based solutions" market, which includes PPM as well as niches like asset management and product development software, will grow to US$6.5 billion by 2010, according to Forrester.
Oracle already had some PPM software but with the Primavera acquisition, seems intent on making the product area a more strategic part of its arsenal.
Once the deal closes, Primavera, which is based in Bala Cynwyd, Pennsylvania, will become part of a new global business unit for PPM at Oracle, which will be led by Primavera CEO Joel Koppelman. Oracle also recently formed global business units for health sciences and insurance.
Wednesday's news prompted a quick reply from Planview.
"I don't think it changes anything for us on a day-to-day operating level. If anything, it raises awareness of the category," said Patrick Tickle, executive vice president of products.
Planview hasn't considered Primavera to be a direct competitor because the latter company's strengths lie around large capital projects, as opposed to IT projects or product development, areas where Planview specializes, he said: "The way Bechtel thinks about something is extremely different than the way a large product organization thinks."
As for Primavera's existing customers, Oracle pledged to "continue to enhance" the vendor's software following the close of the transaction. Oracle also expects to sell and support Primavera software both "in stand-alone situations and with Oracle and non-Oracle environments," the company said.
But it was not immediately clear Wednesday what will happen to Primavera's existing partnership with Oracle's bitter rival, SAP.
"We have customers that use Primavera's offerings and we will continue to support them," said SAP spokesman Saswato Das. "SAP has always had a track record of openness historically. In the end, customers' systems and needs come first."
An Oracle spokeswoman could not immediately provide comment on that partnership.