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Many think the Oracle acquisition of Micros Systems Inc. for $5.3 billion means Oracle is pushing further into...
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the hospitality and retail software markets. But one veteran IT consultant thinks it is primarily about the kind of data Oracle could get from Micros' point-of-sale systems. Micros' point-of-sale systems collect a wealth of data that could be useful for analysis.
R. "Ray" Wang, founder of Constellation Research, said the deal is "a data play." Micros' software captures "a lot of interesting data," Wang said. "Whoever controls the most data sources wins."
For example, POS systems gather data on things such as how long people stay at tables in restaurants, information that Wang said restaurateurs possibly could use to help improve their customer experience. Data analytics capabilities of that sort could give Oracle a new selling point to use with retail and hospitality companies.
The $5.3 billion acquisition is Oracle's biggest since buying Sun Microsystems Inc. in 2010. Aside from point-of-sale systems, Columbia, Maryland-based Micros sells management applications for the hospitality, restaurant and retail industries. It reported revenues of almost $1.3 billion in its fiscal year that ended last June, with customers that include Hard Rock Café, Hyatt Hotels and Ikea.
Micros' POS systems are a good fit for Red Wing Shoe
Red Wing Shoe Company uses Micros' POS systems in its operations. The Red Wing, Minnesota-based company sells work shoes and boots in thousands of stores worldwide, including its own stores. CIO Joe Topinka said he likes how Micros has been able to integrate its POS software with Red Wing's enterprise resource planning (ERP) and e-commerce applications, which are Infor and Vertex, respectively.
Joe TopinkaCIO, Red Wing Shoe Company, on dealing with Oracle
"Multi-channel commerce is like the Holy Grail of retail," Topinka said. "There are a lot of twists and turns and discoveries, and Micros has been keeping up with us." He added that Red Wing has a program that offers footwear at subsidized prices to companies with which it does business, and Micros has facilitated and integrated that into its POS software.
Red Wing currently doesn't run any Oracle software, Topinka said. But he recently met with a local Oracle sales representative, as Red Wing is considering adopting the vendor's Hyperion software for performance management applications. Topinka said his impressions of Oracle had changed from past dealings with the company.
"It used to be, back in the day, that you'd have to get your lawyer," he joked. "That's the first person you'd put on your project team. But it's not as terrifying as it used to be. The new team we've been talking to seemed more progressive and collaborative than I remember from my past life."
The importance of point-of-sale systems
POS systems offer a great opportunity to collect useful data for analysis, Wang said, adding that the data companies like Red Wing can get from Micros' POS can be used to gauge, test and improve the customer experience. That potential for data collection is why Oracle might have been willing to pay a premium price for Micros, according to Wang.
He added that Micros also has customers around the world, so an acquisition allows Oracle to tie everything back to its existing customers. It also helps Oracle further push its "integrated stack" from the processor to the IT hardware to the database to applications. More than 20% of Micros' revenue in the last fiscal year came from selling hardware in the form of workstations and tablets for customers' POS systems.
"It's a really smart acquisition," Wang said.