Microsoft Take Note: Oracle Attempting to Build "Behind-the-Scenes" Security Into its Apps

Includes: MSFT, ORCL
by: William Trent, CFA

Oracle’s (NASDAQ:ORCL) application software company acquisition spree was about more than adding the revenue lines of multiple companies to create the illusion of growth. Ideally the companies, when integrated, will save customers the hassle of integrating them themselves. We wrote in June of Oracle’s attempts to build an end-to-end platform for telecommunications carriers.

According to Convergence TechPlanet, With recent acquisitions like HotSip (a telco infrastructure software company looking at IMS), Net4Call (maker of Parlay/OSA delivery components, which supports legacy telco networks) and Portal (billing and revenue management solutions for telcos and media), Oracle is cobbling together an end-to-end service delivery platform (NYSEARCA:SDP) offering for telcos.

Besides these telco-specific acquisitions, Oracle claims it has a comprehensive offering, with much of the middleware stack (e.g. E-business suite), analytics (e.g. Siebel and Peoplesoft) and backend database (e.g. Oracle 10g) in place.

But industry-specific platforms are one thing. Better still would be to integrate solutions for problems that all businesses face. And according to this week’s Information Week, Oracle is attempting just that:

Last year Oracle purchased three companies specializing in security…. Oracle plans to have its security technology working behind the scenes to ensure that users will have access only to data and applications in [Oracles integrated package called] Fusion that they’re authorized to get.

Integrating security into applications is, to some extent, the holy grail. As we noted when Microsoft (NASDAQ:MSFT) launched its security suite, called Microsoft One:

Of course, the other way to protect Windows users from malicious threats would be to make the operating system more secure in the first place. It remains to be seen whether consumers will be willing to fork over extra money to Microsoft and create a conflict of interest for the company: do we improve Windows or sell more OneCare?

At least Oracle’s system is designed to work behind the scenes rather than as an add-on product that fixes bugs introduced by other Oracle applications. And if it works, the market will embrace it.

ORCL 1-yr chart:

ORCL 1-yr chart

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