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October 21, 2011

Oracle Rounds Out Retail Appeal with Endeca Buy

Nicole Hemsoth

When one looks at the total big data ecosystem from an enterprise perspective, the race is on for companies to deliver comprehensive tools to harness unstructured and structure data flowing in from a seemingly never-ending pool of sources.

However, despite the fact that the market is demanding sophisticated, intuitive analytics capabilities, there are still some rather remarkable disparities in terms of how the big players are addressing these needs. And this could only mean one thing…let the M&A dance begin…

HP jumpstarted the race to integrate the demand for unstructured and structured data management and analytics with its acquisition of Autonomy. Now Oracle has set the stage to bolster its position against HP (not to mention other rivals, including Big Blue and SAP) with a new addition to its ever-increasing portfolio of retail and e-commerce-driven BI tools. Following the integration of new tools into their stack, consider Oracle armed to the teeth for fight to reach big retail with big data requirements that don’t fit well into the nice, neat databases Oracle and others were so well known for.

All the fuss about Oracle’s play into mega-retail and e-commerce is based on their agreement to acquire Massachusetts-based Endeca Technologies for an undisclosed sum (rumors guesstimate that figure to be in the $700-$900 million range). The purchase, which will be finalized by the end of the year, will bring new technologies and tools into the Oracle arsenal, along with a number of household name customers, including Toyota, Ford, Wal-Mart, and General Mills, among other Fortune 1000s.

Endeca managed to weather the dot-com boom, surviving past its founding in 1999, mostly due to its unique technology to support robust, tailored e-commerce search capabilities that, among other things, allowed customers on a given site to browse online products based on sub-product categories like specific brands or lines. Since then, it has expanded far beyond its humble roots to bring full unstructured data analysis capabilities to its initial e-commerce-type customer base.

Among the key enhancements it has made in recent years are the MDEX Engine, which is Endeca’s data store tailored specifically to the needs of retailers. In essence, this is a search and analytics-driven data management engine that provides the flexibility to blend unstructured and structured data, thus allowing a “hybrid” approach to manipulating and analyzing relationships between disparate datasets. It’s InFront product takes over from there by giving Oracle a unique customer experience management platform.

Oracle says that these additions create a particularly complementary relationship with Oracle’s existing stack. For instance, in a detailed presentation on the acquisition, Oracle says that while they have an existing structured data management and analytics toolset, Endeca takes care of the unstructured side—an important differentiator these days as far as retail customers are concerned. Furthermore, Oracle says while it has e-commerce and merchandising solutions in place, Endeca rounds out the portfolio by bringing advanced catalog search, guided navigation and a host of tools aimed at enhancing customer experience management via its InFront product.

As Timothy Prickett Morgan wrote, there is both some overlap with Oracle’s existing products and some new enhancements that clearly boost Oracle’s ability to appeal to new e-commerce-driven customers. He points out that “The Oracle 11g database is where you put your structured operational data, and the MDEX Engine is where you plunk your operational semi-structured or unstructured data. So all that talking that Larry Ellison did only three weeks ago about how ‘we really don’t want to have two separate databases’, one for structured and the other for unstructured data, well, er, not so much.”

Oracle claims that the acquisition will allow them to present a more unified and overarching platform that will allow for the processing and management of both structured and unstructured data. They stated in a release this week that Endeca customers use the platform and data management tools to “correlate, search and analyze semi-structured and unstructured data” which allows customers to get “targeted and relevant experiences online with advanced merchanidizing and content targeting tools for web commerce.”

This purchase certainly positions Oracle as more of a leader in the enterprise analytics game, giving both IBM and SAP a run for their money (theoretically, at least) in terms of core functionality and features that more BI users are looking for. Still, some might argue that on the hardware front, HP, Dell and others are leading the race in terms of their comprehensive software-hardware edges.

Endeca will operate independently until the deal closes, after which more details will emerge about the integration plans for the technologies and the company’s 600 employees.


Nicole Hemsoth is the managing editor of Datanami. She weaves insights and experiences from the world of high performance computing (HPC) and cloud computing into news around the big data ecosystem. She can be reached via email at nicole [at]