Oracle's OAUG Enhancement Request System

An overview of Oracle's Enhancement Request System has been posted on the FIN-SIG website at:

http://finsig.oaug.org/download.shtml

Why Oracle Has Its Eye on India

NEWS ANALYSIS :TECH
By Steve Hamm

A majority stake in banking-software outfit i-flex gives the database giant more leverage against SAP

Software giant Oracle continued its acquisition binge Aug. 2 by purchasing a controlling interest in Indian banking software specialist i-flex Solutions for a price that's expected to top $900 million. It was Oracle's (ORCL ) eighth acquisition this year, and 12th in 18 months.

You can expect more of the same from the maker of databases and corporate applications. "We don't want to play our hand too much, but we're looking now in the telecom and public sectors. There's lots of complexity in the businesses, and no clear market leaders," says Oracle President Charles Phillips (see BW Online, 6/30/05, "Larry Ellison's Roving Eye").

"BUILD OR BUY." Oracle is ramping up its M&A activity in an attempt to make up ground on Germany's SAP (SAP ), the leader in corporate applications. Its strategy is to snap up leading software companies that provide product packages for specific industries. Those products compliment Oracle's databases and general business applications (see BW Online, 7/7/05, "Oracle's Small Step, Bigger Plan").

"Oracle has to do this to become more competitive with SAP," says analyst David Mitchell of market researcher Ovum. "It's build or buy, and I think build takes too long."

The i-flex deal is very different from others Oracle has done in recent months. Rather than buying the company outright, it's paying $593 million in cash for a 41% stake owned by Citigroup (C ), the original investor when i-flex started 13 years ago. Then Oracle is offering to buy up to 20% of the publicly traded shares from investors for a total price of $316 million.

UP TO STANDARD. In this way, Oracle will control the company, keeping it out of the hands of SAP, but i-flex will still be run by a team of successful Indian executives led by Chairman Rajesh Hukku. I-flex grew 42% last fiscal year, to $261 million, and produced net income of $46 million. News of the pending deal began to leak out last week (see BW Online, 7/28/05, "Oracle's Shopping Spree Isn't Over").

The two companies are a good fit. Already, nearly 90% of i-flex's customers use Oracle databases. I-flex's products are based on industry-standard technologies, and Oracle is rebuilding its entire suite of applications to industry standards in a massive three year project it calls Fusion. Having Oracle as a parent will likely help i-flex increase its business with tier-one banks, some of which have been reluctant up until now to bet their technology futures on a relatively small Indian software supplier.

The deal caused a wave of excitement in India. A handful of top Indian tech-services outfits are well known globally, thanks to their outsourcing expertise, but India has only a smattering of software-products companies. I-flex is the most formidable, with 575 customers in 115 countries.

BROWSING THE NEIGHBORHOOD. "This is a validation that one of the world's largest software companies has chosen an Indian software company," says Hukku. "It's a validation of the quality and complexity of Indian software, and it's a shot in the arm for other Indian software product companies." Other possible Indian software targets for acquisition include Polaris Software, another maker of banking software, and Ramco Systems, a maker of tools for developing corporate applications.

Don't be surprised if Oracle's M&A quest leads it back to India again. "We're convinced that a good portion of the next generation of software companies will be emerging from India," says Oracle's Phillips. He spent more than eight months working on the i-flex acquisition. But now he knows the country, so another deal could come much quicker.

http://www.businessweek.com/technology/content/aug2005/tc2005083_4679_tc024.htm?campaign_id=nws_techn_aug5&link_position=link1

Oracle and i-flex

Oracle and i-flex

On August 2, 2005, Oracle announced an agreement to buy Citigroup's 41% equity interest in i-flex. Oracle also announced an open offer to purchase up to an additional 20% ownership interest in i-flex. Following regulatory clearances, Oracle is expected to become the majority shareholder of i-flex through these transactions.

i-flex will continue to operate under current management and remain a publicly traded company. i-flex customers and partners are encouraged to continue using existing contacts for support, professional services and sales to address your ongoing needs.

This transaction underscores Oracle's commitment to the business critical functions of the banking industry, and is a strong endorsement of i-flex's success and tremendous growth. By aligning the talents of both organizations, we will be better able to address the evolving needs of the banking industry.

Follow this link to track details on this transaction:

http://www.oracle.com/iflex/index.html

Oracle To Buy Majority Interest In Indian Banking Software Maker i-flex

Oracle To Buy Majority Interest In Indian Banking Software Maker i-flex 41% to be Purchased from Citigroup and 20% from Public Shareholders

REDWOOD SHORES, Calif., 02-AUG-2005 Oracle (NASDAQ: ORCL) today announced that it will buy a majority interest in India's largest applications software company, i-flex solutions (Bombay Stock Exchange: IFLX.BO and National Stock Exchange of India: IFLX.NS). Software products from i-flex support corporate banking, consumer banking, investment banking, Internet banking, asset management, and investor services. i-flex has provided software and services to 575 banks in 115 countries. "i-flex is the hottest software company in the banking industry, signing more new customers than any other banking software company in each of the last three years," said Oracle CEO, Larry Ellison. "Banking is a strategic industry for Oracle with 9 out of the top 10 banks already running Oracle ERP applications. Oracle's overall application strategy is to go beyond ERP and offer customers richer industry-specific functionality. i-flex gets us there in banking." The current i-flex management team will continue to run the company and will align product development, sales, marketing, and services activities with Oracle. The i-flex service organization will continue to provide deep domain expertise to major banks around the world. Oracle President Charles Phillips will join the i-flex board, and i-flex stock will continue to trade on the Bombay Stock Exchange and the National Stock Exchange of India. "We have enjoyed a long, highly successful partnership with Oracle, and this transaction will be a logical evolution of our relationship," said Rajesh Hukku, Chairman and Managing Director of i-flex solutions. "Aligning with Oracle, we can jointly offer an excellent value proposition to our global customers with truly integrated solutions across the front, middle, and back office." "This investment brings together our complementary technology to offer customers the most comprehensive banking solution for next generation applications, technology and services," said Phillips. "The inevitable transition from legacy systems to modern applications has created a multi-billion dollar opportunity, and because no single supplier has been able to meet customer needs, the banking software market is highly fragmented. Customers have been looking for a Tier 1 software partner to help modernize their systems and lower their maintenance costs." Under terms of the agreement, Oracle will acquire Citigroup Venture Capital International's 41 percent ownership stake in i-flex solutions. As required by Indian law, Oracle will make an open offer beginning on or about August 3, 2005 to purchase an additional 20 percent of the shares outstanding from the remaining shareholders at a price of Rs882.62 per share, with total cash consideration of approximately USD $316 million if the entire 20 percent is tendered into the offer. Subject to regulatory approvals, the transaction is expected to close by the end of 2005. IBM has been a key global partner for i-flex and Oracle. "The i-flex products will continue to run on IBM software and hardware, and our relationship with i-flex aligns us more closely with IBM solutions for our joint banking customers," said Phillips. "In addition, Citigroup remains a committed and loyal customer of i-flex, having recently entered into a 5-year product and services agreement." i-flex applications have been optimized for Oracle's technology platform since 1997, with over 90 percent of i-flex customers currently running on Oracle technology. The i-flex portfolio of software products includes FLEXCUBE(r), the world's #1 selling core banking solution; Reveleus(tm), an advanced business analytic application; and Daybreak(tm), an enterprise consumer-lending suite. In addition, the i-flex PRIMESOURCING offering provides a comprehensive range of software, consulting, development and support services, differentiated by deep domain expertise. i-flex is headquartered in Mumbai, India and employs over 5,500 people worldwide. About i-flex solutions i-flex solutions (Reuters: IFLX.BO and IFLX.NS) is a world leader in providing IT solutions to the financial services industry. For more information about i-flex, visit the i-flex Web site at http://www.iflexsolutions.com.

Customer Data Integration: Where is the Next Generation of Master Data Management Headed?

Article published in the August 2005 issue of the DM Review magazine. Key highlights include:

The customer data integration (CDI) market is in a state of considerable flux as a multitude of diverse technologies compete for large-scale, mission-critical projects. Analyzing data from a 150+ project database containing the vital signs of Global 2000 CDI projects, the CDI Institute is able to project future trends in mind share as well as current market share. During 2005, the average CDI software investment was $1.2 million with the typical large scale CDI project requiring systems integration (SI) fees ranging four to six times the amount spent on the CDI software. This demonstrates the increasing importance of application integration via master data management (MDM) as a catalyst for realizing ROI in large enterprises' multimillion-dollar customer relationship management (CRM) installations. Moreover, CDI is clearly one of the few remaining growth areas for both software vendors and systems integrators.

What is CDI?

The CDI market is comprised of process and technology solutions for recognizing a customer at any touchpoint - while aggregating accurate, up-to-date knowledge about that customer and delivering it in an actionable form "just in time" to touchpoints. Both IT vendors and executive IT management at Global 2000 enterprises need guidance in this fast paced, high stakes market that is the convergence of multiple overlapping middleware markets - e.g., customer recognition, data quality, real-time analytics, data warehouseing, business process management, enterprise application integration (EAI), etc.

While most enterprises have infrastructure initiatives based on the technology platforms of strategic IT partners such as Oracle/PeopleSoft, SAP and Siebel, more than 75 percent of the IT professionals surveyed by the CDI Institute are actively considering purchases "outside the family" to facilitate connectivity between customer-facing applications and processes. CDI strategies systematize a panoramic or 360-degree view of the customer by aggregating and analyzing multiple sources of master customer information into a master "system of record." Such "master data hubs" represent the holy grail of CRM products from Microsoft, Oracle, Siebel and SAP as they enable a single version of the truth across the enterprise's customer-facing processes. It is now a realizable goal for IT organizations to buy rather than build such infrastructure, with more than 95 percent of financial services and life sciences enterprises actively looking to replace homegrown CDI solutions. Additionally, the spate of mergers and acquisitions occurring in the communications service provider industries (telco, cable, satellite) is further creating a need to integrate customer-facing databases and processes as the newly minted mega telcos look to gain operational efficiencies and competitive marketing advantage via mergers. Lastly, many IT professionals are clearly looking to such long-term and large-scale IT initiatives as "career longevity insurance," given that such enterprise-scale infrastructure is not amenable to offshore outsourcing, etc.

Contemporary CDI solutions will vary by industry, for example, in terms of tactical approaches taken:

• Pharmaceutical/life sciences adopt semi-batch, database-centric approaches to deploy master physician data to sales forces.
• Financial services providers and online retailers require near real-time, business- and process-centric solutions to compete in the fast-paced B2C online world.
• Governmental organizations are often restricted in the ways they are permitted to merge and analyze data on their citizens, thus skewing these architectures toward anonymous entity resolution.

For planning purposes, it is often important to know where you came from as well as where you are going. This holds true for an enterprise CDI strategy per the marketing mantra often recited by CRM vendors: CRM is a journey - an ongoing process - not a product or a way station. In that spirit, we outline the basic road map of CDI solution evolution:

• First-Generation CDI. These solutions are most often standalone databases or files managed by monolithic applications such as IBM's Transaction Processing Facility (used by airlines), CSC's Hogan banking system or even early generation Siebel Systems' sales force automation installations.
• Second-Generation CDI. These solutions are "uni-modal" in that they are specialized for either batch or online updates and are database-centric master customer files. Frequently participating in bidirectional updates, these are either "data-centric" in using ETL (extract, transform and load) solutions or "process-centric" in depending heavily upon workflow.
• Third-Generation CDI. These approaches offer "multi-modality" and are flexible enough to support batch and online performance, loosely and tightly coupled application models, etc. Specifically, this variation supports a service oriented architecture (SOA) model in terms of Web services for a "business services" approach. This approach also increasingly provides support for the federation model whereby individual business units retain some autonomy in managing their "master" data assets yet participate in a "union" or "confederation." Additionally, a third-generation solution must support the tremendous scalability requirements, as well as reliability and availability, associated with mission-critical infrastructure.
• Fourth-Generation CDI. These systems provide extreme scalability because they are of the architecture required to support massive numbers of users such as business-to-consumer e-commerce or self-directed service centers. The systems also are designed to support unstructured content such as free-form text, video and audio in addition to structured database records.

For more details, read this article at:

http://www.dmreview.com/article_sub.cfm?articleId=1033571