Oracle said it will continue to sell Oblix’s software separately, but will cherry-pick features for its own identity infrastructure offering, which is expected to include Project Fusion, Oracle’s post-PeopleSoft enterprise applications roadmap.

The acquisition has already closed, and assuming it was in the works back in January, when Oracle was spelling out its plans for its recently acquired PeopleSoft assets, it may help explain Mr Ellison’s comments when discussing Fusion.

He said then that Fusion will use a role-based security model that’s built into the database and said: We want all the security to be in the database and middleware, to get the advantages of single sign-on and intrusion prevention that you don’t get if you deploy a SAP solution.

Fusion sees Oracle draw the best technology from PeopleSoft and JD Edwards’ catalogs, plus its own software, and bundle it into a standards based architecture built on Java and internet standards such DHTML.

More details of how Oblix fits into this plan are expected to come today, when Thomas Kurian, senior vice president of Oracle Server Technologies, will explain more about the integration in a conference call with analysts and press.

Oblix has been styling itself as the last remaining independent IAM provider ever since Computer Associates International picked up Netegrity last October. Its COREid, SHAREid, and COREsv products are in some big name marquee accounts.

The software enables single sign-on to multiple applications and web sites, and the newer products are designed to enable federated identity between sites and companies via protocols such as SAML.

Buying Oblix and keeping its products alive means Oracle will be able to keep selling IAM software that works across heterogeneous environments, not just Oracle deployments.

Oblix also announced a major investment from Siemens in September last year, saying it would help it compete against larger firms and in Europe. Getting Oracle’s sales force behind its software is clearly the final step in becoming a big player.

Oracle did not disclose the size of the acquisition. Oblix is private, but has received multiple funding rounds totaling in the high tens of millions of dollars going back to the company’s launch in 1996.

It’s a busy time for Oracle’s financial and legal teams. Fresh from a two-year battle to take over PeopleSoft, Oracle found itself in a bidding war with SAP for control of retail apps specialist Retek, which ended last week with a $630 million Oracle deal being signed.

In the midst of all this, the company’s CFO, Harry You, jumped ship abruptly to help out struggling consultant BearingPoint as its new CEO. Expect questions about management distraction to be asked during forthcoming Oracle analyst Q&As.