Implications for technology market, enterprises explored
Boston December 13, 2004 Capping an 18-month drama, Oracle has announced that it successfully negotiated a deal to acquire PeopleSoft for $26.50 per share.
The Yankee Group forecasted the outcome 18 months ago (see June 2003 research note, "Successful Marriage of Oracle and PeopleSoft Will Take Long Courtship and Strong Prenup"). Yankee Group research conducted during the past 24 months provided the basis for our prediction, including research on IT spending and analysis of emerging network and communications technology-based business strategies and processes (see February 2004 research note, "Enterprises Allocate 34 % of IT Spending to Solve Edge Business Problems").
As vendors struggle to understand and develop solutions for technology-enabled business processes at the edge of the enterprise, we expect additional mergers and acquisition (M&A) activity in technology markets. The highest priority process area will be a new breed of supply-chain management called network supply management outlined in the April 2004 research note, "The 4-Year Supply Chain Technology Vendor Roadmap," which examined additional M&A opportunities and predicted winners and losers.
What Does this Mean to the Technology Market?
For a second opinion on the Oracle-PeopleSoft deal, see the AMR Research alert "Oracle Buys PeopleSoft: Let the Healing Begin."
Boston December 13, 2004 Capping an 18-month drama, Oracle has announced that it successfully negotiated a deal to acquire PeopleSoft for $26.50 per share.
The Yankee Group forecasted the outcome 18 months ago (see June 2003 research note, "Successful Marriage of Oracle and PeopleSoft Will Take Long Courtship and Strong Prenup"). Yankee Group research conducted during the past 24 months provided the basis for our prediction, including research on IT spending and analysis of emerging network and communications technology-based business strategies and processes (see February 2004 research note, "Enterprises Allocate 34 % of IT Spending to Solve Edge Business Problems").
As vendors struggle to understand and develop solutions for technology-enabled business processes at the edge of the enterprise, we expect additional mergers and acquisition (M&A) activity in technology markets. The highest priority process area will be a new breed of supply-chain management called network supply management outlined in the April 2004 research note, "The 4-Year Supply Chain Technology Vendor Roadmap," which examined additional M&A opportunities and predicted winners and losers.
What Does this Mean to the Technology Market?
- The overall market for technologies used inside the enterprise is mature. With few exceptions, the opportunity to sell technology used solely within the four walls of a company has passed. Naturally, there will be exceptions by industry, such as healthcare and public sector, and sporadic technology spending driven by regulations or compliance initiatives, such as Sarbanes-Oxley.
- More M&A will occur in technology markets. Oracle's success means other vendors will execute deals. Numerous vendors are targets, notably Siebel Systems and BEA.
- Standardize the technology backbone within the enterprise. Most CIOs have the mandate of reducing the complexity and cost of enterprise technologies. Executing standardization strategies enables CIOs to do two things: hold total IT budgets flat while freeing up dollars to fund technology-enabled business initiatives.
For a second opinion on the Oracle-PeopleSoft deal, see the AMR Research alert "Oracle Buys PeopleSoft: Let the Healing Begin."
Companies in this article
