Though Oracle Corp. has become one of the most active acquirers in the tech world, it hasn't had a lot to say about how it actually manages its transaction process -- a contrast with the likes of IBM Corp. and Cisco Systems Inc., both of which have shared best practices about how they do deals. So attendees at a session at ACG InterGrowthThursday got a rare glimpse behind the curtain when Oracle SVP for corporate development Doug Kehring described Oracle's M&A life cycle.

Oracle has learned a lot in the course of targeting, acquiring and integrating 41 acquisitions in the last 45 months. On a banking league table for software deals in the period, Kehring pointed out, Oracle's $34.2 billion in deals would put it in fifth place.

But Oracle, as we've noted, doesn't use bankers, not even for the contentious, $8.5 billion acquisition of BEA Systems Inc. in January. Instead it relies on co-presidents Chuck Phillips and Safra Katz, backed up by Kehring and a 16-person strategy and corp dev team. Chairman Larry Ellison has also been known to weigh in from time to time.

Oracle is similarly self-reliant on integration, trying a big consulting firm on the 2005 PeopleSoft integration but deciding to do things itself instead. Kehring says speed is paramount in Oracle's integrations, and that targets immediately adopt Oracle's back-office policies. "We're buying the go-to-market part of the business," he said.

Like IBM, Oracle has a software tool that tracks integration. And as at most successful acquirers, sponsorship of the deal by a business exec is considered crucial; the best deals, says Kehring, come from the product team. Tracking of acquisition performance continues on a quarterly basis for two years after close, another practice common among successful acquirers.

Kehring noted the importance of effectively communicating the deal, the subject of a recent cover story in The Deal newsweekly. He doesn't  think Oracle archrival Microsoft Corp. is doing this very well in its pursuit of Yahoo! Inc., since there have been different executives saying different things in different settings.

Helping Kehring out were Amit Singh, an Oracle group vp for products and enterprise sales; Guy Yehiav, who joined Oracle when it acquired Demantra, a supply chain management specialist  in 2006; and moderator Michael McFadden, co-CEO of Lazard Middle Market. Among other things, their presence helped Kehring drive home another one of his points -- that contrary to Oracle's reputation as a consolidator, most of its deals have been about extending its footprint into new areas.

Of course, the deals have also been about improving Oracle's financial performance; the company's operating margins have doubled since 1998, Kehring noted. Software is a business where scale really pays. - Kenneth Klee

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