One of the giants

Along with Microsoft and IBM, Oracle is one of the three largest software companies in the world. It specializes in database and middleware software, as well as applications, but also has a large consulting business through which it offers strategy and analysis, business process optimization, product implementation, enhancements and upgrades, and ongoing managed services. Although the consulting division only accounted for 15 percent of revenue in fiscal 2008, it was still a billion-dollar enterprise, bringing in almost $3.5 billion. Just over half (51 percent) of 2008 revenue was generated in the Americas, with Europe, the Middle East and Africa (EMEA) accounting for 35 percent, and the remainder (14 percent) coming from Asia Pacific.

The firm was founded by Larry Ellison in 1977 as Software Development Laboratories. The name, of course, didn't stick. After a brief run from 1979 to 1982 as Relational Software, it became Oracle Systems, reflecting the success of its flagship product, the Oracle Database. The firm's history in the consulting biz doesn't go back quite as far, however, having developed out of a sales force split in 1992 that divided sales personnel into those selling database software and those selling applications. During the tech boom of the late 1990s, applications and consulting services were in such high demand that the firm's services division tripled its revenue and became a major practice area.

Seeking the Oracle

The firm is active in an enormous range of industries, including aerospace and defense, automotive, chemicals, communications, consumer products, education and research, energy, engineering and construction, financial services, health care, high tech, homeland security, industrial manufacturing, life sciences, professional services, public sector, retail, travel and transportation, and utilities. Its client list features corporations starting with every letter of the alphabet, with AstraZeneca, BP and Coca-Cola at the start to Xerox, the YMCA and Zebra Technologies bringing up the rear. Oracle claims that its technology is a component of the databases of 99 of the Fortune 100.

Because the firm is a major software vendor, it is frequently in a position to offer consulting services to clients who have purchased licenses or application packages. It's common in the industry for IT companies to separate their services and software lines, but Oracle is up front about tying the two together. The firm often strikes deals to implement and maintain the software it has just sold. This creates a dual relationship not only with its clients, but also with its rivals. Oracle holds alliances with a number of other vendors, such as Accenture, HP and IBM, with whom it also competes.

Get and spend

Oracle takes an aggressive stance on growth through acquisition. In fiscal 2008 alone, it spent $9.4 billion snatching up other companies. By far the largest deal that year was the $8.6 billion purchase of BEA Systems, a provider of enterprise application infrastructure solutions. The acquisition enhanced the firm's middleware portfolio, especially with regard to service-oriented architecture infrastructure. Following the fiscal year's end in May, the firm went on to make several more acquisitions, including, the October 2008 pickup of Primavera Software, Inc., a provider of project portfolio management solutions. The purchase will enhance Oracle's service offerings for project-intensive industries, such as engineering and construction, the public sector, aerospace and defense, utilities, oil and gas, manufacturing and high tech, and IT and services.

A couple of significant (and pricey) acquisitions were also made in 2007. In April that year, the firm completed a $3.3 billion transaction for Hyperion, a maker of performance analysis and tracking software that counts 91 of the Fortune 100 among its clients. The deal greatly increased the firm's presence in the enterprise performance management market. Then, in May 2007, Oracle came away with Agile Software Corporation, a provider of product lifecycle management solutions, for $495 million, giving a substantial boost to its existing product lifecycle assets.