Oracle buys G-Log

Staff -- Purchasing, 10/20/2005

Software behemoth Oracle in late September announced it was buying transportation management systems (TMS) provider G-Log for an undisclosed amount. While the deal made barely a blip in the general software market news (mainstream press headlines read "Oracle buys another company" or "Ellison's shopping spree continues"), the move drew a mixed reaction from logistics market watchers.

"The acquisition of G-Log will allow Oracle to offer a comprehensive supply chain and logistics management solution through which companies can better manage their global supply chains," said Rick Jewell, senior vice president of applications development at Oracle. "With G-Log's proven transportation management platform and Oracle's leading technology infrastructure, ERP and supply chain applications, customers will now have an integrated offering for the lean enterprise."

AMR Research's Lora Cecere was upbeat about the deal, saying, "G-Log has a strong legacy in transportation management, with a leading research and development staff in global TMS, but TMS remains a small, if not important, niche market. While G-Log has 44 customers, with a strong presence in EMEA and Asia, it's tough to make it in today's market as a small vendor. As part of Oracle, it's assured survival."

Some market watchers were not so rosy on the deal, though. "Oracle also inherits some of G-Log's challenges," says Adrian Gonzalez of ARC Advisory Group. "[G-Log's] GC3 solution is too complex and pricey for the mid-market, the fastest growing segment of TMS. While it might become more cost-competitive by leveraging Oracle's tools and infrastructure, it is unlikely that they'll be able to compete effectively from a cost standpoint with on-demand providers unless they offer similar pricing and deployment options."

ARC said the market for TMS grew to about $910 million in 2004 and is forecasted to exceed $950 million this year. ARC is forecasting the market to reach $1.2 billion by 2009.