Who will challenge Oracle in the insurance market?
Earlier this month, after Oracle announced its acquisition of insurance software maker Admin Server, I asked this question:
Is this Oracle’s big break into the insurance market?
At that point, it may have been hard to say. But this week, after Oracle made yet another acquisition announcement, many are saying it’s likely that the software giant is ready to dominate the insurance market.
Oracle will acquire Skywire Software, an insurance software provider and maker of applications for insurance policy life cycle management, in a deal that’s expected to close in the second half of 2008.
Matthew Josefowicz, director of Novarica’s insurance practice, was quoted in this Insurance and Technology article as saying:
“If the acquisition of AdminServer was Oracle’s planting the flag on the shore of the insurer software business, the subsequent acquisition of Skywire Software is a declaration of Manifest Destiny.”
In Oracle’s official press release, President Charles Phillips clearly suggests that the Skyware acquisition will not be the last of Oracle’s steps into the insurance software industry:
“Insurance is a strategic industry for Oracle with growth focused on integrated packaged applications,” he said. “Adding Skywire Software to our growing portfolio of insurance software products further accelerates our investment in and commitment to providing the most modern and complete software solutions for this industry.”
Now the next questions: Will other vendors follow Oracle’s lead with acquisitions? Will Oracle have to fight with Microsoft, IBM or SAP for the top spot in the insurance software industry?
Let’s take a look at these vendors’ current insurance offerings:
Microsoft: Microsoft’s latest insurance software addition is just one of many that use Microsoft’s own .NET Framework. In this article, Celent analyst Donald Light says that he thinks Microsoft will continue to “stick to its guns to not buy outside software vendors.”
IBM: IBM continues to develop its own insurance solutions, such as these new SOA-powered applications. Light says that he thinks IBM will continue its partner-based (rather than acquisition-based) approach.
SAP: Light seems to think that SAP could go either way - - decide to stick with its “homegrown products” or make insurance software vendor acquisitions. SAP’s SOA-based insurance products have been gaining popularity recently in the industry.
So, while it seems like Oracle is the only one making the big acquisitions (anyone surprised?) at the moment in the insurance software industry, only time will tell if others will follow suit. What do you think?
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