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Oracle takes integrated approach with G-Log buy

Oracle bought G-Log to address a growing demand for logistics software integration, but the firm still trails rival SAP and other transportation software makers, analysts said.

G-Log, we barely knew you.

Less than five months after Oracle revealed plans to gobble up G-Log Inc., a King of Prussia, Penn.-based provider of supply chain management and logistics software, Oracle today announced that it's dropping the G-Log name in favor of Oracle Transportation Management.

Oracle purchased G-Log to address a growing demand for logistics software integration, but obstacles remain in the company's drive to overtake SAP as the overall leader in business applications, analysts said.


What G-Log brings to the table

There are many details to consider when it comes to moving freight as efficiently as possible. Companies must decide where the freight is going, who will move it and at what cost, which mode of transportation is best, and the list goes on.

Historically, businesses used multiple independent applications to address these individual transportation issues. But the last few years have seen a gradual move away from this highly siloed approach.

"There has been a big trend toward integrating all the pieces of a transportation solution," said Noha Tohamy, a principal supply chain management analyst with Forrester Research in Cambridge, Mass. That trend is precisely what drew Oracle to G-Log, she added.

Tohamy said G-Log's Web-based software integrates each aspect of the transportation planning and execution process. She added that the six-year-old G-Log product dwarfs Oracle and SAP transportation offerings in terms of functionality.

"G-Log gives Oracle really good transportation functionality," Tohamy said. "But just as importantly, it gives them a customer base in the third-party logistics provider space. Many of them are looking to invest in transportation solutions."

The SAP advantage

The integrated functionality that Oracle is now offering with the former G-Log suite may not be enough to help Oracle steal transportation customers away from its chief rival, SAP, but it is a solid beginning, Tohamy said.

"SAP remains a pretty tough competitor for Oracle -- not so much based on the functionality of their transportation solution, but more because of the total cost of ownership," Tohamy said. "'You can get it integrated with your [enterprise resource planning system]' is the typical SAP argument."

But SAP isn't the only competitor that Oracle has to worry about. According to Tohamy, the current leader in transportation software is Manhattan Associates Inc., a company that got its start providing warehouse management software but has more recently made waves addressing all aspects of freight management.

Other companies currently ahead of Oracle and SAP in the transportation software market include i2 Technologies Inc. and Manugistics Inc., Tohamy said.

Features and functionality

Oracle says its newly acquired Oracle Transportation Management product is designed to reduce transportation costs and cycle times related to moving freight. The foundation of the product is G-Log's flagship Global Command and Control Center.

From there, says Mark Johnson, a senior director of product marketing with Oracle, users can procure goods from suppliers, arrange to ship freight, track shipments and produce historical analyses.

"The value behind integrated suites of products is that it's not just about the data flow; they're integrated with the process flow," said Johnson. "You're getting better data and you're pooling more data across that network, so you're getting better optimization. But the real big value is cycle time."

Currently companies can purchase the product on a stand-alone basis. Later this year, it will be offered as part of the Oracle E-Business Suite, Johnson said.

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