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What will this mean for existing customers of LODESTAR? According to Guerry Waters, VP Industry Strategy and Marketing of the Oracle Utilities Global Business Unit, and Glenn MacRill, VP of North American Sales for LODESTAR, after the operations of the two companies are merged following the closing of the deal, the combined operations will continue to sell and support all of the current LODESTAR products, even those based on non-Oracle technology. Another advantage is that current customers will be able to draw on the resources of a larger corporation, and be able to install additional software from the Oracle suite of products more easily. This will help mitigate a key concern of utilities: integration costs for utility systems.

Oracle is a firm supporter of systems oriented architecture (SOA) which allows utilities and other businesses to loosely couple software systems together rather than building a myriad of point-to-point interfaces that are expensive to develop and even more expensive to maintain. The acquisition of LODESTAR is consistent with offering a broad suite of products for the utility sector that are based on SOA. Utilities have demonstrated a strong interest in moving toward SOA by investing in new software that is built from the ground up on the SOA platforms. More than a few of the utilities that participated in UtiliPoint's recent webinars on meter data management mentioned replacing numerous software systems (billing, meter inventory, GIS, customer data presentment, outage management, workforce management to name a few) in their goal to more easily integrate these systems together. One large utility noted it would replace 75 percent of its software systems over the next seven years.

For new customers of Oracle, utilities will see a broad suite of products that address their needs of today. Many utilities are actively pursuing advanced metering (AMI) and require software systems that are up to the task of turning millions upon millions of meter reads into useful information for utility operations and planning, and for customers. An AMI investment can provide significant benefits, but it also places stress on legacy software systems that are based on out-dated business rules. Some of these outdated rules include:

• A rate change is always accompanied by a meter change (with AMI, many different rates are supported by one endpoint, so it is no longer necessary to change the meter if customers change their rate).
• Customer meters are read on a cycle (with AMI, customer meters are read every day).
• Customers are billed on a cycle corresponding to their meter read date (since customer meters are read every day, customers billing cycles can be based on other factors, such as customer preference, method of payment, etc.).
• If a utility receives a report of an outage by only one customer, the utility should wait until other customers call in before responding to this outage report (with AMI, utilities can check immediately if the customer has power, reducing the response time to the customer).

Utilities need software systems that are more flexible, resulting in systems that adapt to change. It is clear that changes in operations will continue and the pace of change is expected to increase as new technologies are adapted for the utility sector. It will be even more important in 2012 than it is in 2007 for utilities to be able to change business rules without needing major revisions to their software. Oracle will be well positioned to offer utilities value for their software spending dollar. The LODESTAR acquisition will extend their offering into the key area of meter data management, as well as several other key back office applications not currently supported by Oracle Utilities.

Oracle Utilities intends to continue to work with all of their current partners as well as the partners of LODESTAR. This may lead to some concerns on the part of other meter data management vendors since many of the leading meter data management products utilize Oracle technology. Essentially Oracle is competing with its own customers. However, this is not new or uncommon in this sector. Itron competes directly with other AMI providers and yet Itron Centron meters are commonly enabled with AMI meter modules provided by Itron competitors. It will be imperative for Oracle to assure its Oracle technology customers that even though Oracle is gearing up to compete in the utility back office sector, it will continue to provide quality products and services to its technology customers. The meter data management competition is protected by Oracle's tremendous success in their technology even while they are threatened by Oracle's move to acquire both SPL and LODESTAR.

The acquisition of LODESTAR by Oracle ends speculation as to whether Oracle Utilities will develop its own meter data management system. Clearly, LODESTAR will be the meter data management product from Oracle. UtiliPoint believes this will be a good acquisition for Oracle, in line with utility sector priorities. The AMI and MDM train is moving down the tracks, and vendors are advised to get aboard the train because this train isn't going to slow down anytime soon.

Where will Oracle's roving eye stop next? Will it be a GIS vendor? Or Gestalt?