Given the current rumor mill: What if Oracle and Accenture joined forces?

Recent news suggested that a merger between Oracle and Accenture might be on the horizon, which would be big news for the IT industry. In the meantime, Oracle has denied that it has the intention to buy Accenture. However, just assuming the rumors are true, we at CXP group expect some major consequences from such a move. It would certainly trigger a series of significant changes in the equilibrium between product vendors and service providers. One of the questions would be whether it would come to a culture clash between Oracle and Accenture. Clearly, Oracle has become a professional in company takeovers. However, so far almost all companies acquired by Oracle have been product companies, and under the Oracle regime only very few successful product continuations out of these companies can be reported. The acquisition of a service company like Accenture would be of a different nature, however. Besides, whereas Accenture is a customer solution-oriented company, Oracle is often seen as a product push-selling company, centered around its database. We also doubt that Oracle would be able to retain all of Accenture's staff. Instead, a larger percentage of employees would be likely to see the acquisition as an opportunity to look for alternatives. Because one thing is clear: the IT industry is looking for talent in a big way so job opportunities at other service providers are aplenty. Hence, Oracle might end up spending a lot of money for a partially empty shell.

On the other hand, Oracle's consideration to buy a major service company could have been foreseeable given Oracle's efforts to complement IBM as a full-service IT provider. Oracle has broadened its software portfolio over the past few years and bought Sun mainly as a hardware company. Oracle is also currently trying to push its cloud computing offering. Accenture is a very important systems integrator for the Oracle stack, and both companies have intensified their collaboration on cloud-related Oracle solutions and services in the past.

Oracle has however never been really successful in offering product-independent services. In addition, Oracle has switched on and off its engagement in the field of service offerings, sometimes leaving it to partners and sometimes trying to pull it back into the company.

Further consequences of the bold move of merging might affect Accenture’s cooperation with other application providers, like SAP or Salesforce. These current partners of Accenture would certainly not be amused about an acquisition and would most likely turn towards other service providers. Also Accenture's customers would think twice to engage Accenture for future SAP, Salesforce and other application software implementations. Oracle's goal would therefore probably be to convince existing SAP and Salesforce customers to at least try Oracle applications as well.

Bottom line: At the moment, we see major risks not only for Oracle and Accenture but also for customers, as well as major opportunities for other service providers.