Oracle Corp.'s planned $495 million acquisition of Agile Corp., announced yesterday, signals the software giant's renewed interest in the product lifecycle management (PLM) market as a strategic opportunity, as well as a willingness to challenge archrival SAP AG in some of that company's core manufacturing vertical industries, experts said.

Oracle said it will pay $8.10 for each share of Agile. The proposed acquisition, subject to regulatory and shareholder approval, is expected to close in mid- to late July, Oracle said.

"We consider [Agile] to be a leading provider of PLM management solutions with very deep industry and domain experience, plus a strong, referenceable set of customers," said Jon Chorley, Oracle's vice president for supply chain execution and product lifecycle management strategy, in an interview with Managing Automation. Chorley estimated that about half of Agile's 1,250 PLM customers use Oracle applications.

"That means that, out of the gate, we have a product with shared customers and proven integration that will allow us to rapidly sell the product into our installed base," Chorley added.

Oracle also plans to sell Agile's set of product data collaboration and other tools as stand-alone, best-of-breed products into the installed base of SAP and other competitors, he said. "SAP does not have a strong PLM solution," Chorley maintained. "We now have a strong solution ... We will be very pleased to be able to help SAP customers satisfy their PLM requirements."

SAP officials did not respond by press time to calls seeking comment on the acquisition.

In fact, experts said yesterday, Oracle, with this acquisition, is playing catch-up to SAP in the PLM space. SAP last year sold $500 million in PLM software and services, according to Ed Miller, president of consulting firm CIMdata Inc.

While that is a relatively small piece of SAP's overall business, PLM has, until now, represented a competitive advantage for SAP over Oracle, explained Jim Shepherd, a senior vice president at AMR Research. "We've seen competitive situations between SAP and Oracle where PLM has become an issue," he said. "It may not be at the top of most companies' lists, but when one vendor has it and the other doesn't, it can be a differentiator."

Oracle's addition of Agile's PLM products — particularly the new Agile 9.2 suite — gives the ERP vendor a strong competitor to SAP's PLM offering, Shepherd said.

Besides giving Oracle a credible PLM offering, the Agile acquisition would strengthen Oracle's competitive position in manufacturing markets, such as high technology, life sciences, consumer products, and food and beverage. Those are some of the markets where SAP has held a competitive edge over Oracle, experts noted today.