Oracle sets its sights on engineering and construction with Textura buy

It's paying $663 million to complement its Primavera project-management software

20151027 oracle cloud on building
Credit: Stephen Lawson

Oracle is spending $663 million to buy Textura, a company that offers cloud services for the engineering and construction industry.

Textura's products will be combined with Oracle's existing Primavera project-management suite -- the result of a 2008 acquisition by the database giant -- in the Oracle Engineering and Construction Global Business Unit, Oracle announced on Thursday. The focus of that unit will be offering a comprehensive cloud-based project control and execution platform that manages all phases of engineering and construction projects.

"The increasingly global engineering and construction industry requires digital modernization in a way that automates manual processes and embraces the power of cloud computing to easily connect the construction job site, reduce cost overruns and improve productivity," said Mike Sicilia, a senior vice president at Oracle who will lead the newly expanded business unit.

Companies are expected to spend $17.5 trillion on construction by 2030, but roughly 10 percent of that spending gets wasted, Oracle says.

The acquisition is expected to close before the end of the year. Until then, Textura will continue to operate independently.

Textura’s cloud services process $3.4 billion in payments for more than 6,000 projects each month, Oracle said. More than 85,000 contractors and subcontractors are connected to the platform.

Following this acquisition, Oracle plans to continue to invest in the engineering and construction industry, it said.

The move is an example of Oracle's longstanding strategy of buying its way into specific industries. Its 2014 purchase of Micros Systems, for instance, gained it entry into hospitality and retail.

"Oracle hasn’t led in many key IT transitions for at least a decade," said Patrick Moorhead, president and principal analyst with Moor Insights & Strategy.

"It’s not in the company’s best interests to change anything, as they have a captive customer audience," Moorhead added. "It’s hard to leave Oracle once you get it installed."

Oracle was "the last major solutions company to embrace the cloud" for that reason, leading to its strategy of growing inorganically through acquisitions, he said. "The Textura acquisition falls right in line with that strategy."

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