Oracle is rumoured to have hired global specialists in a bid to weigh up the viability of acquiring Accenture.
Sources cited by The Register are said to have told them that a team of consultants are conducting due diligence in order to “explore the synergies that could be created if they (Oracle) bought Accenture lock stock and barrel,” the source said.
The source added that, “while these things have a habit of fizzling out there are some fairly serious players around the table.”
It is thought that Big Red is very much at the start of the process of evaluating whether or not the deal would be feasible.
Given that Accenture is valued at around $78bn, at time of writing, one of the biggest stumbling blocks would be the amount of money that Oracle would have to splash to acquire the consultancy firm outright.
Although Oracle has a long history of acquiring firms, most recently NetSuite for $9.3bn, the majority of its acquisitions have hovered around the $10bn mark and below, with the PeopleSoft deal in 2005 being the largest at $10.3bn.
A deal for Accenture would certainly be a much larger deal for Oracle, especially given that the company has recently posted net revenues growing at 6% up to $8.3bn and operating income up by the same amount to $1.14bn.
While the deal could be an expensive one, it might be worth the gamble considering Oracle’s new found cloud first approach.
Oracle has been placing a much greater emphasis on its cloud business over the past couple of years and has posted consistently impressive growth figures, but it still lags a long way behind clear market leaders Amazon Web Services and other cloud giants such as Microsoft, Google and IBM.
Accenture made clear its cloud focused approach with the acquisition of Cloud Sherpas and a long list of firms associated with various elements of digital transformation.
Accenture’s strength around Salesforce could also give Oracle a link back to the CRM company at a time when it appears to be moving away from its reliance upon Big Red’s data centres, while its ability to support digital transformation projects could also give Oracle a welcome boost.
Although there are a number of potential benefits to Big Red buying Accenture, there would also be a significant number of challenges, not least the cost.
Accenture works with the majority of Oracle’s rivals, see IBM, SAP, Salesforce, AWS, Microsoft – if you are considering them all to be cloud competitors to Big Red’s goal of being top dog in the cloud market.
If Accenture were to become part of Big Red’s operations then it would no doubt put significant strain on those relationships.
Oracle has declined to comment.