“Together, Oracle and Opower will provide the industry with the most complete, modern and integrated cloud platform for the entire utility value chain, from meter to grid to end-customers”, Rodger Smith, senior vice president and general manager of Oracle Utilities Global Business Unit, wrote in a letter to customers and partners.
Opower became a publicly traded company two years ago and reported revenue of $148.7 million in 2015, up 16%. However, slow sales cycles and unprofitability had pushed the company’s stock price steadily downward, forcing it to shed its thermostat business and expand beyond efficiency. Earlier this month, Opower cut 7.5 percent of its workforce in order to scale back R&D spending ($100 million and counting), tighten its sales and marketing teams, and focus on customer care solutions.
Validating this acquisition as a means to boost profitability, Dan Yates, Chief Executive Officer and Co-Founder, Opower said:
“We believe the fit between our front-end customer engagement tools and Oracle’s back-end operational systems is a natural one. We are excited to join Oracle Utilities and to bring even more value to you as part of the Oracle Utilities Industry Cloud Platform.”
The deal comes as the second large buyout announced by Oracle announced recently. Customers of Pacific Gas & Electric in California, one of the largest combination natural gas and electricity utilities in the USA, have so far saved around $51.4 million on their collective energy bills, according to Oracle. Also, last week’s Textura buy gave it a leg up in engineering and construction.
Opower’s big data platform stores and analyzes over 600 billion meter reads from 60 million utility end customers, enabling utilities to proactively meet regulatory requirements, decrease the cost to serve, and improve customer satisfaction. It enables more than 100 global utilities, including PG&E, Exelon and National Grid, delivering energy efficient solutions to utilities providers.
Undoubtedly, Opower would be Oracle’s new tool to create a more robust cloud portfolio for utility vendors. However, Opower will continue to operate independently until the transaction closes, which is expected later this year. The union will create the largest provider of mission-critical cloud services to an industry that’s worth $2.3 trillion, Oracle said.