Oracle acquires Skire for project portfolio mgmt

The big continue to get bigger. Last Thursday, Oracle announced that it was acquiring the assets of Skire, a Silicon Valley maker of capital projects management software for the process industries. I first ran across Skire about ten years ago at a Daratech Plant conference and have watched with interest as the company tried to find a foothold for technology that was, at first, far ahead of its time. Skire’s CEO, Massy Mehdipour, had worked her way up through the ranks at Bechtel and in the 1990s founded a company that offered project management services to clients like Intel. That business shifted over time to providing software, first for cost management,  then for scheduling and resource management and, in 2000, Skire was born. Skire’s platform is much broader today, and the company shares many clients with Oracle (and SAP, but that’s clearly another story). What’s interesting about this acquisition is that Oracle’s Primavera overlaps in some project management functions with Skire and the companies often bid against one another.  In its announcementof the acquisition, Oracle said that it would combine Skire with Primavera in order to “create a full lifecycle Enterprise Project Portfolio Management (EPPM) platform that provides a comprehensive offering from capital planning and construction to operations and maintenance for owners and operators, contractors and sub-contractors.” Oracle also said that it intends to “continue to invest in Skire technology, evolving the solutions organically and deepening the integration capabilities with Oracle technology”. The combination makes sense. Skire’s focus is on the financial aspects of capital projects, while Oracle Primavera is more about managing long-range planning and delivery of programs and projects. If done well, the combination will enable customers to have a one-stop purchase to cover many more aspects of the asset lifecycle, from planning to interacting with contractors to construction and operations/maintenance. That kind of broad visibility should improve both control and outcome. Oracle and Skire did not release financial information about the acquisition. We do know that Skire was originally venture funded and that Ms. Mehdipour bought those investors out in 2002, after dot-com crash. In a 2010 profile, she said revenue was about $25 million in 2009 and that the company has been profitable since 2005. The transaction is subject to customary closing conditions and approvals and is expected to close in the second half of 2012. In a letter to customers, Oracle said that the companies will operate independently until closing and that it is “business as usual” for now. The letter also says that Skire’s management and employees are expected to join Oracle’s Primavera business unit. This acquisition highlights the focus Oracle is placing on asset-heavy industries, especially in facilities and process and power. In 2005, Oracle acquired JD Edwards, the ERP tool of choice for many construction companies. In 2008, it added Primavera to its portfolio, the leading construction scheduling and contract management tool. Now, with the Skire acquisition, Oracle is closer to offering a full solution for both construction contractors and asset owners. In a perfect world, the asset data (CAD models, visualization, operation data, and so on) would follow suit, moving smoothly from contractor to owner, but we’re not yet at that point. Look for the trend of combining construction with design, project management, financial control and planning to continue. Mobile devices, the cloud, improved user interfaces, better data integration — all mean that we can now start to address the huge inefficiencies on just about all job sites.