Large Oracle reseller Red Rock Consulting has bought leading PeopleSoft partner BML in a deal tipped to maximise gains and signal a wave of partner consolidation after last year's Oracle-PeopleSoft merger.
Jonathan Rubinsztein, director at Red Rock Consulting, said customers had been asking for PeopleSoft skills and expertise after Oracle's takeover of PeopleSoft.
"It's very much a customer-driven acquisition," he said. "A lot of our Oracle customers are asking us to do pieces of work we haven't been able to do."
Oracle customers had naturally hoped their Oracle and PeopleSoft needs would be filled by one shop after the two giant vendors had merged. But that hadn't been possible at first, Rubinsztein said.
"We have a very significant support base. We support customers at an application management level. We now have almost 70 customers that we support across Australia and New Zealand and, in fact, in five different countries," he said.
"A bunch said 'can we do PeopleSoft?' and our response had been that we couldn't. So it was a no-brainer for us."
The deal would extend Red Rock's delivery capability for PeopleSoft services, do other PeopleSoft services and introduce PeopleSoft customers to Oracle technology services, Rubinsztein said.
Also, Red Rock would get to extend into PeopleSoft application management services and give it an ability to provide both Oracle and PeopleSoft customers "a kind of safe passage" to any new product fusing both technologies, Rubinsztein said.
Warren Brugger, application alliances and channels director at Oracle, said the deal might signal a wave of Oracle-PeopleSoft partner consolidation. "I can't confirm that, but I think we'll see more of that moving forward," he said.
The Red Rock-BML move supported Oracle's strategy around market consolidation. "That makes it easy for us to do business with them," Brugger said. "It's good for customers. They have a choice to deal with a local partner, with one organisation that can position the most appropriate solution and give them critical mass as well."
He said the acquisition would help Oracle fight against SAP and Siebel as well. For example, Red Rock could offer services with CRM, with PeopleSoft bringing added CRM functionality to Red Rock offerings.
Red Rock was adding 35 people to make a total staff of around 140, Brugger said.
Rubinsztein said Red Rock and BML began talking about a possible deal soon after the Oracle-PeopleSoft news broke last year but the deal had now been sealed. Red Rock would acquire BML for a combination of cash and shares based on a multiple of BML's current earnings.
He said the main challenge would be integrating the two resellers. Red Rock managing director Greg Woollett and Rubinsztein would helm the merged entity, and BML would be rebranded.
No staff rationalisation was expected – in fact, Red Rock had 18 positions up for grabs and expected to need still more staff in the near future, Rubinsztein said.
Red Rock had worked with BML previously so that might ease the way. "We've had a working relationship with BML for more than four years, so we know them fairly well," Rubinsztein said.