Recent acquisitions by RedPrairie, Oracle and IBM signal a new round of
consolidation in the tech sector, something we have witnessed before. But this time it’s different. This time it’s not just about the big getting bigger. Instead, it points to a larger trend in corporate America, one that recognizes the new reality that we are all in the retail industry.
Thanks to 24/7 connectivity the banking industry is now in retail. Healthcare is in retail. Government services are in retail. Consumer goods companies are in retail. The auto industry is in retail. The education, transportation, utilities, media, real estate, travel and hospitality sectors are all in retail. This means that technologies supporting retail functions are in red-hot demand.
Wonder why IBM went on a retail technology buying spree last year? It wasn’t a sudden urge to make a deep dive into the retail vertical. Instead it was to beef up its position in retail technologies that can be used across multiple industries. IBM now has the most complete end-to-end cross-channel retail solutions portfolio in the business, thanks to the recent additions of Sterling Commerce, Coremetrics and Unica complementing its Websphere Commerce platform. Oracle is also well positioned to capitalize on this trend thanks to the recent addition of ATG to its growing Oracle E-Business Suite.
And now RedPrairie enters this select company thanks to the recent acquisition of Escalate Retail, which comes fast on the heels of purchasing SofTechnics several weeks earlier. As Tom Kozenski, vice president of RedPrairie said to me in a call, “It’s great for us to be a technology solution used in stores, but shoppers are shopping everywhere.” And the Escalate acquisition gives RedPrairie shop-anywhere capabilities.
As a growing number of businesses morph into the retailing business, the vendors that possess B2C or multi-channel support capabilities will be ideally positioned. Vendors that don’t currently possess these technologies must either seek acquisition targets (and there are many) or develop them internally, although they risk lagging behind in a fast-paced race.
My guess is the current acquisition binge will continue at a rapid clip and the prime takeover targets will have B2C or related capabilities. Retailers are now in the unaccustomed position of being technology leaders that other industries look to as they race to catch up.