Oracle got its acquisitions strategy off to a jackrabbit start for 2010 by announcing the purchase of Silver Creek Systems, which specializes in data quality management software.
Silver Creek’s flagship data quality offering, called DataLens, aims to simplify product descriptions, thereby helping enterprise users more accurately manage product data. Oracle officials believe the product can improve product data quality in applications such as the company’s Product Information Management Data Hub, Agile Product Lifecycle Management, and ERP-based products.
Given the lack of depth in Oracle’s data quality lineup, some analysts think the move was overdue.
“From our perspective, this is a good move by Oracle, but it’s a surprise they didn’t do this sooner," said Ted Friedman, a vice president and distinguished analyst with Gartner. “Data quality capabilities have been a bit of a gap in the Oracle portfolio."
Friedman noted that while Oracle’s Warehouse Builder has some rudimentary data quality capabilities, the company has relied on its partnership with Trillium Software to provide users with data quality products, along with the year-long OEM deal it has had with Silver Creek to provide data quality.
“Having data quality in the portfolio proper was important for them,” Friedman said.
What may have inspired Oracle’s acquisition of Silver Creek was the OEM partnership it entered into last year with the Westminster, Colo.-based company, which opened Oracle’s eyes to all the complexities and ramifications of managing data quality well.
“That partnership showed them there is a lot more required to managing product data quality," said Ray Wang, a partner with the Altimeter Group. "When you think about what is happening in the Web 2.0 world, where the consumer world meets the enterprise world, we need a lot more data quality and data integration to occur for things like presence and location-based services to happen.”
Rob Karel, principal analyst with Forrester Research, added that Oracle may have felt pressure to acquire Silver Creek. If Silver Creek had been acquired by an Oracle competitor -- not unlikely given how quickly the data quality market is consolidating -- Oracle would have been put in the awkward position of OEMing a competitor’s software, Karel said.
“Not having data quality capabilities in house in a fast consolidating environment is a risk,” he said.
The technology used in Silver Creek’s DataLens product is largely a semantic-based recognition that leverages the words in the text to recognize uniqueness, Karel said. It looks at the actual values of the data itself, not just at the metadata. It can look at words in the data and recognize that “black” is the same as “blk,” which is the same code named “B,” and be able to connect them.
“This is even more important for product data because there can be so many variations in terminology,” Karel said.
With the addition of DataLens, Oracle takes an important step toward establishing a data management stack, something in which Fortune 100 companies have a growing interest. Oracle’s other information management products include Oracle Data Integration, Oracle Data Quality, Oracle Master Data Management, and Oracle Business Intelligence.
“This [deal] actually gives them a considerable master data management stack, although it may not be something they tout with this," Wang said. "But when you think of someone like Wal-Mart or Target with all these SKUs and numbers, and the buyers are trying to figure out how they all relate to each other, products like this are important.”
Financial details of the transaction were not disclosed. Oracle spokespeople declined to comment on when the deal might be approved.