Oracle Snags 20th Acquisition Since PeopleSoft

Oracle Corp. snapped-up privately held Demantra Inc. Thursday to expand its supply chain planning applications, adding No. 20 to the acquisition list since buying PeopleSoft in January 2005.

The acquisition is expected to help Oracle expand its supply-chain applications business, and focus on the consumer product goods (CPG) industry. Demantra's supply chain software is used by Coca Cola, Welch's, Wendy's and others to forecast supply and demand.

Less than 7 percent of Oracle customers have implemented demand-planning applications from the Redwood Shores, Calif., company because its software lacked functions customers need, said Lora Cecere, research director at AMR Research Inc.

"A bicycle can get you to the grocery store, but Acura or Mercedes is a better ride," Cecere said. "Oracle had fundamental demand-planning applications, but even with the acquisitions of JD Edwards, PeopleSoft, and even Retek, Oracle didn't have the capabilities that companies needed to be demand driven."

Jon Chorley, Oracle's vice president of supply chain strategy, agreed. "Demantra's applications strengthen an area within supply chain planning where our solutions were a little weak," he said "We plan to integrate Demantra into Oracle's Advanced Planning and Scheduling product suite, which will take data feeds from sales, forecasts, budgets and trade promotions management applications."

Data will also feed product information into Oracle's Global Order Promising platform, which takes the actual supply on-hand and predicts demand. This allows manufacturers to promise customers an accurate available ship date. Replacing older applications with Demantra, which is built on a J2EE platform, should take months, not years, Chorley said.

John Bertmudez, Demantra vice president of marketing, said most CPGs spend between 30 percent and 40 percent of total company revenue on "trade funds," which are given to the sales force to pay for store, newspaper and other advertising. "Most CPGs spend about half of their marketing budget on trade funds for promotions," he said. "Welch's, for example, spends more than $100 million annually on trade funds." The acquisition points toward trends focused on collaborative planning for supply and demand, in part, by reducing silos of information within a company, said Christian Smith, vice president of sales of market at eProject Inc., a company with about $16 million annual revenue that offers on-demand project and portfolio services.

Bart Feldman, Demantra's chief technology officer and founder, will stay on with Oracle to work in research and development. Demantra was founded in Israel in 1996, and now based in Waltham, Mass. Bill Seibel, Demantra's CEO, will remain through August to assist with the transition. Chorley said nearly all of the remaining 85 employees will have an opportunity to join Oracle.

The companies did not disclose financial terms, but the Israeli online site "Globes" estimates the deal at $41 million in cash. Demantra has disclosed $42 million in funding from Advent international, Intel Capital, Cargill Ventures and others.

Oracle acquisitions since January 2005:

June 2006— Demantra for demand-driven planning capabilities

April 2006—Net4Call focus on service delivery platform for the telecommunications industry

April 2006—Portal Software, packaged enterprise software suite for the communications industry

February 2006—Sleepycat, a privately held supplier of open source database software for developers of embedded applications

February 2006—HotSip focused on communications infrastructures

January 2006—Siebel for customer relationship management capabilities

January 2006—360Commerce for merchandising, supply chain, and optimization features

December 2005—TempoSoft for workforce management and intellectual property

November 2005— Thor Technologies offers identity and access management offerings

November 2005— OctetString to gain identity and access management capabilities

October 2005— Innobase for discrete transactional open source database technology

September 2005—G-Log for transportation management, including logistics, import/export compliance

August 2005— i-flex to target the banking industry

July 2005— Context Media focus on enterprise content integration software

July 2005— ProfitLogic for forecast management features

June 2005— TripleHop for enterprise search technology

June 2005— TimesTen for real-time data management

April 2005— Retek to serve retail industry with planning, merchandising, supply chain software

March 2005— Oblix focuses on identity management

January 2005— PeopleSoft for enterprise software