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Oracle: Thanks, but No Thanks on Accenture Deal

Oracle still has big plans for the cloud, but those will not include Accenture, according to a published report.

For a week, Oracle offered a tepid response to rumors that it was exploring an acquisition of Accenture that first appeared in The Register. A deal between the two would create a huge force in the cloud computing market, and Oracle has a history of big, splashy deals, including its recent $9.3 billion agreement for NetSuite. (See Oracle to Close $9B NetSuite Buyout.)

An Oracle spokeswoman originally declined to comment to Enterprise Cloud News last week in an email, and a message to Accenture was not returned. By declining to comment, however, Oracle left open the door that it could still be working on the deal but not talking about it publicly. This, in turn, helped fuel rumors that a deal of some type was still in the works.

That came to crashing halt on April 2, when Oracle finally shot down the story to Fortune. "The Accenture rumor is completely untrue. Never even considered it," a spokeswoman told the publication.

Oracle and Accenture already have a number of different partnerships, so the two firms already work together.

No way (Source: Wikipedia)
No way (Source: Wikipedia)

The deal would also have not come cheap, even for Oracle. As Light Reading's Ray Le Maistre pointed out, Accenture recently reported a 5% year-on-year increase in fiscal second-quarter revenues to $8.3 billion and a similar increase in operating profits to $1.14 billion. The company now commands a market value of $75.3 billion. (See Does Oracle Have the Hots for Accenture?.)

Oracle has made the cloud a cornerstone of its business model going forward. "There's sort of an inevitability. It's not technical change, it's business model change for the industry," CEO Mark Hurd said at a recent conference in Florida. (See Oracle CEO Mark Hurd: Eventually, We'll Get Them All.)

Like other older software firms that are used to selling software on a per-license basis, Oracle has struggled with its cloud transformation even as it's seen its revenue increase as the cloud grows as part of its business. (See Oracle's Cloud Transition Pays Off.)

Earlier this year, Oracle, as well as Microsoft, started laying off employees who work within their hardware businesses as they shift to their cloud strategies. (See Microsoft, Oracle Layoffs Loom as Companies Pursue Cloud Plans.)

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— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

mhhfive 4/26/2017 | 9:47:00 AM
Re: Accenture is not the right fit.. That makes more sense, but still not complete sense. Accenture still needs a cloud division to competently provide many of its services, and spinning that off to Oracle would have still resulted in some loss of credibility as an independent consultancy free to use "best of breed" technologies.
Scott_Ferguson 4/26/2017 | 9:31:29 AM
Re: Accenture is not the right fit.. @mhhfive: I was speaking to some folks who had heard about the deal and knew some of the players, and if it was a real offer, it would have only been for the cloud section of Accenture, not the whole company. That was my understanding. It should be noted that Oracle and Accenture do already have a relationship and it seems to be working for both companies.
mhhfive 4/25/2017 | 6:49:39 PM
Accenture is not the right fit.. The rumors of this deal must have come from some strange investors.. because Accenture doesn't really seem to complement Oracle that much. Accenture has a strength in *not* being beholden to any particular technology, so it would lose some credibility if it were owned by Oracle. 

I could see Oracle trying to diverisify its own business with Accenture, but it really wouldn't work, in my opinion, because Accenture needs to stay independent to provide its consulting services. 
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