Way, way back in 2004, your correspondent covered a small Tennessee software company, SiteWorks Solutions. Oracle bought it and, uncharacteristically for Oracle, wanted to discuss the purchase. We interviewed executives at Oracle and SiteWorks. It seemed like a sound strategy.
In the years afterward, we would periodically ask Oracle how that deal had worked out. Were Oracle customers experimenting with the SiteWorks applications? The answer? Silence. We have no idea if the SiteWorks solution (which offered clinical trial management for sponsors and sites) was a success, failure, or somewhere in the middle. The SiteWorks founder, as far as we can tell from LinkedIn, does not currently work for Oracle.
Are there lessons here for Oracle's acquisition of Phase Forward? By adding the top electronic data capture (EDC) supplier, Oracle can regain its bragging rights to the No. 1 position. The Redwood Shores, California database goliath is not backing out of the clinical trial technology market. It wants to own it. With the deal, meanwhile, sponsors of clinical trials are getting everything they always wanted: a large, solid supplier able to stick with projects over many years.
WIth more than $25 billion in annual revenue, $18 billion in cash and a hugely profitable stream of maintenance revenue, Oracle has the perfect financial health that only drug companies themselves enjoy in a wounded economy. The ability to give away EDC technology was just one sign of the vigor with which Oracle competed prior to the Phase Forward deal.
The fact that many sponsors still didn't want Oracle's technology at a cost of zero is now a historical footnote. Some customers must have EDC; Oracle will now be able to charge for it. And there is the potential to sell sponsors more technology from Siebel, Relsys and other companies acquired by Oracle in recent years.
The more relevant questions about Oracle, in 2010, concern focus and culture. Can Oracle be small? Or will all of its initiatives and programs be geared to some mammoth, global battle with a few remaining IT firms that Oracle regards as peers? Can Oracle figure out how to knit its solutions together? Is that possible?
Does anyone at the upper levels of Oracle know even what pharmacovigilance is? Does anyone at Oracle have a view whether it should energetically support the Clinical Data Interchange Standards Consortium (CDISC) guidelines for clinical trial databases? Can Oracle migrate trials for a key client (Pfizer) away from the lowly regarded Oracle EDC system that that client helped to create?
All of those issues will either be handled with focus, or with the usual Dilbertian drift and chaos common to all large companies.
It's just our opinion. But Oracle needs to think small. Small does not mean two guys in a garage. Small means taking care of small and mid-sized pharma companies as well as big pharma. Small means being able to customize clinical trial systems and still make them work. Small means pricing that makes sense for sponsors that are just getting started.
Oracle's success has had one unfortunate consequence. It has lead to an arrogance that is culturally out of sync in the life sciences. Oracle can be proud of its domination in databases. But the attitude of the company is off-putting in ways that make it a cultural outlier among vendors supporting clinical trials.
As with the children with two wildly different parents, it will be interesting to see whether the hypercompetiive, scorched-earth Oracle DNA prevails in the years to come. Could the more gentle, collaborative Phase Forward DNA surface inside the Oracle bureaucracy?
One possibility, of course, is that the products of other industry verticals conquered by Oracle (retail, financial services) will be retooled for the clinical trial world. Oracle's competitors are betting on that. They expect some sponsors to say, we're not getting the attention we need from Oracle. Are there any solid, smaller companies that can handle this?
Because Oracle by policy often ignores news media requests (feeling that its chief executive has been too harshly written up for his sailboats, girlfriends and executive suite dramas) it's impossible to know whether the company will continue to offer all of the clinical tools it has purchased. Which tools will be shut down? When? A few customers presumably know, but the road map is hardly public.
Could Oracle keep alive similar programs for the same task? That would run counter to the acquisitions playbook for most software companies. Oracle has at least two systems for EDC; at least three systems for randomization; at least four systems for drug safety; and at least two clinical data warehouses. If you put all of this on a PowerPoint slide, it would be a challenge to read.
If Oracle does dump the second- or third-tier applications in its portfolio, some customers might cheer. The hallelujahs would be rooted in the same frustration that cost Oracle the leadership position in EDC, and which motivated its acquisition of Phase Forward earlier this year.
Naturally Oracle would never strand customers in the middle of a project. But shutting down some of its tools could cause consternation for other customers. Some sponsors may reopen decisions on key systems used in clinical research. The transition, clearly, will be tricky. For companies competing with Oracle, the transition presents opportunity.
If Oracle holds onto the multiplicity of options it has in each niche of clinical trials, it faces a daunting challenge of training its staff on more than one piece of software to do the same thing. That's an unenviable predicament.
Finally, Oracle is re-writing everything it offers to run on top of something called Fusion. Fusion is middleware, a technical term for a rock in your shoe. Middleware is expensive, takes forever to develop, and sits between you and the software you really need. Will all Phase Forward applications be written for Fusion? Some of them?
It's also worth noting that history shows Oracle has been a bad firm to underestimate. It has squished or outmaneuvered many rivals of greater size and sophistication than it currently faces in the clinical trial landscape. Its knowledge of health care, while not of any immediate use in clinical trials, could be another plus down the road if pharma can gain access to more ordinary patient data. An unusually broad portfolio of tools and customers could give it unprecedented reach across the clinical research sector.