Primavera has grown during its 25 years to approach $200 million in expected revenue for 2008, after first topping $100 million in 2005. Recent growth was fueled by investors who, in 2006, together invested some $175 million to $200 million in Primavera, enabling it to pursue acquisitions and other growth initiatives.

Primavera's product line fits reasonably with Oracle's, despite some overlap that will take time to position for the market and for the Oracle sales force. Primavera will form one of only seven Oracle global business units (GBUs), indicating that Primavera will take a primary position in Oracle's PPM strategy, complemented by Oracle Projects and PeopleSoft Enterprise Service Automation (see "How Oracle-Primavera Deal Impacts Energy Firms and Utilities").

The connection between Oracle Projects and Primavera's flagship P6 product is central to this deal. Oracle Projects is used widely for cost management on large capital projects — often the same big construction jobs that use P6 for scheduling. In recent years it has added significant project resource allocation, contract management and planning features, but Oracle Projects still relied on integrations to Microsoft Project and Primavera for full project scheduling. Many customers of Primavera had already integrated its tools with Oracle's to bring project costs into their ERP system of record. So, with this acquisition, Oracle gains a new GBU, strengthens its own Oracle Projects PPM story and reduces its reliance on Microsoft's scheduling engine.

Issues around company differences could undermine the acquisition's success. Oracle sales uptake of Primavera products could conflict with the extensive Primavera reseller channel, although both Oracle and Primavera executives stated that the Primavera Authorized Representative (PAR) program would remain intact and aligned with the new GBU.

Continuity in leadership of the acquired unit is also a risk, though both companies provided assurances against that risk with the announced intent to have Joel Koppelman, Primavera’s CEO, head up the new GBU.

Primavera's traditional investment in high levels of service and support could be undermined in a publicly held company driven to continually grow margins.

The enterprise PPM opportunity extends past construction and large capital projects. Primavera's high-tech and manufacturing-facing PPM solution may be developed to complement the product life cycle products that Oracle gained through the acquisition of Agile Software in 2007. Also, the Oracle sales force will likely be more effective than Primavera's in reaching IT and services organizations.

Primavera customers: Expect little medium-term impact, including to users of Primavera's interface to SAP, which the company states will continue to be supported. Consider locking in longer-term Primavera maintenance contracts at current rates.