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Will Latest Acquisition Help Oracle Play Bigger Role In More Regulated Financial Industry?

During an earnings call last month, Oracle's CEO Larry Ellison said the global economic slowdown would present the company with more opportunities to make acquisitions in niche segments, something the mammoth software vendor has been doing a lot of lately.
During an earnings call last month, Oracle's CEO Larry Ellison said the global economic slowdown would present the company with more opportunities to make acquisitions in niche segments, something the mammoth software vendor has been doing a lot of lately.Niche software-maker Haley, one of 10 companies Oracle acquired in 2008, fits this pattern and seems to suggest the software giant expects more government regulation from the incoming Obama administration since the Haley policy automation platform is most often used in industries that are highly regulated, such as financial services and insurance, to implement and manage complicated and rapidly changing policies. Financial services customers also can use the Haley tools to more effectively manage the business rules that govern trading, lending, underwriting, claims, origination and fraud prevention. In an interview last Thursday at Oracle headquarters, Sonny Singh, senior VP of Oracle's products and industries business unit, downplayed the idea that the Haley acquisition might help Oracle play a possible new role in a more regulated financial industry.

"The goal is to provide an end-to-end solution for social services agencies," Singh said. "It's part of our ongoing vertical industry specialization, which incorporates Oracle's ERP and Siebel CRM functionality into editions for financial services, insurance, health care, communications and media, and so on." Singh denied the vertical industry strategy was initiated by the 2005 acquisition of Siebel's CRM business, which had a vertical industry focus prior to joining Oracle. "It's more than just backfilling Seibel's vertical market CRM apps with Oracle's ERP functionality. Oracle applications were focusing on vertical industries several years before 2005."

According to Singh, Oracle will offer the first packaged software solution for social services agencies with a case management application that will use the Haley business rules engine to make eligibility determinations. Singh explained that public sector social service agencies are using software to automate entitlements since they have limited resources to serve a growing constituency and they need to administer and distribute entitlements consistently. Haley's policy automation platform can also translate legislation and policies into defined, automated rules that can be deployed in an application.

Oracle President Charles Phillips echoed Singh's point in a separate sit-down interview last Friday. "Governments and businesses face significant operating challenges nowadays with demographic shifts, globalization and budget constraints," Phillips said. "The Haley technology is important since it simplifies the process of managing complex legislative and business policies." In a wide-ranging interview, Phillips explained the business value to Oracle customers of the upcoming release of Oracle's next-generation Fusion suite of applications, which features tightly integrated business analytics and collaboration based on Web 2.0 technologies, such as unified communications, wikis, and instant messaging. "We're giving our customers this Web 2.0 functionality for the cost of keeping their maintenance contracts current." Philips said he expects Oracle's Fusion Apps will be a "game-changer," especially compared with SAP's strategy of evolving its current ERP release piece by piece. Phillips also said he and other top Oracle management had been in contact with key members of president-elect Obama's leadership team since before the election, but declined to speculate on Obama's choice of a federal CTO.