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Oracle is grabbing a lead spot in identity management

Conventional wisdom was wrong regarding Oracle's ability to acquire its way into identity management. Oracle has gone from nowhere to a market leader in three years.

In the 1990s and early 2000s, Oracle dabbled in the identity space with database access controls and a network directory. But it really wasn't considered a player in this space.

This changed in 2005 when Oracle acquired its way into identity management with the purchase of Oblix and Thor Technologies. Even with these acquisitions, many industry watchers never thought that Oracle could buy its way into the market and weave disparate products into an integrated suite.

Once again, common wisdom was completely wrong. While others struggle or abandon this space, Oracle has vaulted to a leadership position. In fact, my sources tell me they see Oracle in every large deal these days. The fact is that Oracle saw the identity management space as strategic and invested accordingly to become a market leader because:

• Identity management is a business--not an IT--initiative. Back in the 1990s, identity management was all about technology tools to manage user provisioning and security. Now it's about mapping employees and outsiders to business processes, managing user roles, and meeting regulatory compliance mandates. When identity management evolved from a set of IT tools to a business application, deal sizes skyrocketed.

• Identity management is middleware. Oracle wants to own identity middleware just like it wants to own application integration middleware. Identity is the glue between users, applications, and distributed systems.

• Identity management projects can be huge. Identity management is like ERP in that it means years of process definition, role creation, custom development, and systems integration. This is right up Oracle's alley.

Oracle isn't alone in this space. IBM still kills it on product and services. Identity is one of CA's healthiest businesses. Novell has great technology, and Microsoft is a sleeping giant. These guys won't lie down, but Oracle went from nowhere to become a market leader in three years. That won't change in the future.

Jon Oltsik is a senior analyst at the Enterprise Strategy Group.