The news is that Oracle is buying independent ecommerce software provider, ATG (Art Technology Group) of Cambridge, MA for $1 billion. I think it’s a good move for both companies.
ATG is known as a premium provider of ecommerce solutions at a relatively affordable price with more pre-built solutions that its larger competitors who have delivered ecommerce more or less as a toolkit. However, I also think that the company lacked the size to compete on its own with companies like IBM whose reputation still has a great deal of weight in the board room where decisions about which technology to spend millions of dollars on come from.
The only other company in a similar position is NetSuite the leading provider of SaaS based ERP which also has a good ecommerce product. Interestingly, NetSuite’s (NYSE: N) majority owner is Larry Ellison, CEO of Oracle.
With Oracle behind it and a ready customer base of Oracle CRM and ERP customers—including Oracle CRM On-Demand—it looks like Oracle will recoup its investment quickly. ATG, meanwhile, will gain a larger audience and Oracle’s backing. There’s a lot to like in this.
Oracle may be looking down the road at a world that will be more dependent on ecommerce. As transportation prices increase due to high-energy costs, there is evidence that consumers may travel less and ecommerce solutions will undoubtedly be called on the fill some of the gap for retailers who will begin to see fewer people in their mall stores.
Regardless of whether the transportation scenario plays out, it is a reasonable conclusion that if a vendor like Oracle can get behind a company like ATG, which offers lower cost ecommerce solutions, market demand for these solutions will expand because the lower price point brings out new demand.