The dust has begun to settle on Oracle's surprise move to acquire business intelligence (BI) powerhouse Hyperion, but challenging questions remain.
On the one hand, Oracle inherits 12,000 customers and becomes the clear BI market leader. The deal marks the 24th acquisition in Oracle's three-year-long campaign to dominate the enterprise applications space. But how will Oracle integrate all its BI products? How will Hyperion fit into Project Fusion? Are other pure-play BI vendors going to fall victim to further market consolidation? How will SAP respond?
SearchDataManagement.com invited a panel of industry experts to share their views on the announcement and to predict what's in store for Oracle and for the BI market.
Mark Rittman, Independent Oracle consultant, developer and trainer
The business logic of this deal looks pretty compelling, and I think this is a hugely positive move by Oracle.
I think that they'll keep all the current products going, although Hyperion's Brio is the most likely to be phased out over time. Hyperion's products will form the core of Oracle's Fusion corporate performance management (CPM) offerings, while Oracle Discoverer will be for E-Business Suite reporting and Oracle's BI Suite EE will be for enterprise business analytics.
However, to think of this in terms of Essbase vs. Oracle OLAP, or Brio vs. Discoverer, or even Hyperion's applications vs. PeopleSoft EPM is, I think, to miss the scale or the enormity of what's going on. What this is really about is Oracle vs. SAP -- all Oracle does now, strategically, is framed in its desire to be the No. 1 enterprise software vendor, which means being the No. 1 ERP vendor, as all else flows from that. Oracle now is an ERP vendor with a nice sideline in databases and development tools, not the other way around, and they'll happily live with a more heterogeneous tools and technology environment if it means they can get closer to that goal.
|Michael A. Schiff|
Michael A. Schiff, Founder, MAS Strategies
Oracle may now have the highest quantity of BI products, but they don't necessarily have the highest quality. Not every Oracle BI product is the best-of-breed. However, rather than go with the best-of-breed in every category, many companies prefer to go with the best product in an important category and then use a "good enough" product from the same vendor for other categories. This may provide Oracle with an advantage. However, Oracle still has to integrate all of its acquired technology (something that Hyperion was doing with its acquired technology with the Hyperion System 9), and decide which to favor and which to sunset.
Major BI vendors like Business Objects and Cognos will go after Hyperion's installed base in an attempt to migrate them to their own products. In the short term, Hyperion sales will slow down as prospects wait to see how Oracle will treat the acquired Hyperion technology. Smaller BI companies may have problems convincing prospects that they will be around for the long term rather than being acquired by other companies. The BI game is not a "winner take all" situation. It is certainly possible, and quite likely, for a company to have multiple products from multiple vendors.
Stuart Mullins, Senior Data Warehouse Architect, Conversion Services International Inc.
For Oracle, the acquisition of Hyperion is less about adding to its suite of applications than about gaining a sizeable block of SAP and IBM customers. This will create opportunities for Business Objects, Cognos and other "independent" BI vendors. Although they may become the target of acquisition themselves, they will market their independence to Hyperion customers. Oracle has been successful at retaining customers from previous acquisitions, so I wouldn't bet against them here. Speculation that other firms could be targets for takeover will draw investment dollars to the BI marketplace. That should increase competition and drive down prices, but it may also stifle innovation until the market shakes out.
Rick Sherman, Founder, Athena IT Solutions Inc.
Is this deal good for the industry? It depends on who you are. I think this is a terrific acquisition by Oracle. It needed to upgrade its BI and performance management offerings and Hyperion is a great option. But this acquisition is not just about technology products, but also includes Hyperion's large customer base, extensive financial application expertise and well-established relationships with its customers' CFOs and finance groups. The latter is very strategic for Oracle and may be why it acquired Hyperion instead of another firm.
Oracle will certainly own one of the biggest stables of BI products, but does it have the
highest-quality collection? No and yes. First, Oracle has to rationalize and position its
collection of products into a cohesive roadmap for its customers and prospects. Otherwise, the FUD
(fear, uncertainly and doubt) factor will haunt Oracle's BI product stable. Second, there are many
terrific BI products on the market today. Will Oracle's offerings be on par with these other
products? Yes, but I'd be hard-pressed to say that each of its products are best-in-class.