Oracle Buys ATG: Bad News for Marketing Automation?

So…Oracle bought ATG today for $6.00 per share or, as the press release puts it with charming nonchalance, “approximately $1.0 billion”. I can’t exactly say I told you so, since this particular pairing never crossed my mind. But if you look back at my “doughnuts and pizza slices” post on software acquisitions, it does make perfect sense. ATG is a specialist in e-commerce (the ERM doughnut in the online operations pizza slice), an area where Oracle’s traditional ERM products are weak. As my model suggests it should, ATG also encompasses online CRM and online marketing, where Oracle’s Siebel line is also a little thin.

Since Oracle is already strong in offline ERM and offline analytics, ATG leaves Oracle just one slice short of a pie. In other words, Oracle needs a Web analytics product. With Omniture, CoreMetrics and Unica already gone, only Webtrends is an option…unless Oracle gobbles up Adobe. ‘nuff said.

So much for the obvious. What I really care about is the implications for marketing systems. I’d say the ATG purchase lessens the odds of Oracle buying a marketing automation vendor. The logic is this: buying ATG suggests that Oracle, like IBM (which put Unica in its WebSphere organization), is focusing on online marketing rather than marketing automation in general. Since ATG itself provides substantial online marketing functionality, there’s a smaller gap for Oracle to fill with a separate marketing automation purchase. Nor have I forgotten that Oracle already bought marketing automation vendor Market2Lead, plugging a different set of holes.

If anything, Oracle (and IBM) need to strengthen their position in online advertising. I'd look for them to buy tools to manage banner ads, search ads, and search engine optimization. This in turn could point towards investments in content management and digital asset management systems. That also leads further away from standard marketing automation.

The day-to-day impact of all this on marketers is slight. They still need marketing automation tools to do their jobs. If anything, they’re better served by having some marketing automation vendors remain independent, since this keeps prices down and encourages competitive innovation. A less-helpful result may be to further isolate digital marketing from other channels, when what we need is to integrate them more closely. Perhaps digital marketing systems will grow to the point that they take over offline marketing as well. I hadn't expected such a role reversal, but it’s certainly possible. Just ask Oedipus. Not that that turned out so well.