September 7, 2016. Yesterday, Oracle announced its acquisition of Atlanta-based LogFire. This announcement follows on the heels of its $9.3B acquisition of NetSuite. LogFire offers SaaS-based warehouse management software for retailers, 3rd-party logistics (3PL) companies, wholesale distributors, manufacturers and ecommerce retailers. According to the press release, Oracle is intending enhance its own Supply Chain Management suite with the LogFire acquisition.
In January of 2016, research group Garner had LogFire positioned as a Visionary in its Magic Quadrant for Warehouse Management Systems.
In our view, the LogFire acquisition provides Oracle with an ability to accelerate the transition of its on-premise applications business to a cloud-based subscription model. Recently, Oracle reportedly changed its internal sales and channel compensation models to incentivize the sale of SaaS subscriptions and dis-incentivize the sale of on-premise perpetual licenses. Notwithstanding the revised commission structure, many believed that Oracle's operations-focussed (e.g. manufacturing, distribution, planning) SaaS-based applications weren't yet fully-baked.
The LogFire acquisition provides Oracle with a best-of-breed software that can generate immediate revenues. However, questions about Oracle's integration strategy remain, with SaaS integration issues remaining a major barrier to end-customer SaaS adoption.