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Magic Quadrant: Small CPM software vendors take on Oracle, SAP, IBM

Mark Brunelli, News Editor

Oracle Corp., SAP and IBM are the leaders of the corporate performance management (CPM) software market by a long shot. But organizations looking for the most innovative approaches to CPM should consider smaller vendors, according to a new Magic Quadrant report from Stamford, Conn.-based Gartner Inc.

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CPM software marketplace has seen a great deal of consolidation in the last five years as large vendors gobbled up smaller players in an effort to build out more robust CPM offerings. For example, Oracle purchased CPM software maker Hyperion Solutions Corp. in 2007 and, more recently, IBM purchased financial governance software maker Clarity Systems last October. Gartner reports that as a result of the acquisition spree, the three megavendors now control a combined 75% of the market for CPM software.

But despite the ongoing wave of consolidation, there are still more than 90 specialists -- companies like Longview Solutions, Tagetik Corp. and KCI Computing -- that offer complete or partial CPM software packages. And those smaller vendors are leading the way in terms of innovation, according to Gartner.

"Innovation doesn't necessarily easily manifest itself in a large vendor. They have to worry about continuity of supply, they have to worry about large customer bases and they have to worry about global execution," said Neil Chandler, a Gartner research director and co-author of the new Magic Quadrant for Corporate Performance Management Suites. "If you're looking for innovation, if you're looking for something unique or you're looking for competitive advantage, you may well find that in an innovative smaller vendor versus a large one."

CPM technology falls under the broader category of business intelligence (BI) software and focuses on helping users monitor and manage corporate performance in areas such as strategy formulation, budgeting and forecasting. With CPM, organizations can measure performance against predefined indicators like revenue, return on investment, overhead and operational costs. A typical CPM software package might include analytics applications related to financial consolidation or regulatory reporting, and it can give users a better understanding of what drives profits, according to Gartner.

The Gartner Magic Quadrant for CPM Suites ranks CPM software vendors as leaders, challengers, visionaries or niche players based on several metrics including completeness of vision and ability to execute.

"From a customer satisfaction point of view, the smaller vendors delight their customers more than the bigger vendors," Chandler said. "Larger vendors are more challenged by the diversity and by the complexity of their customers."

Smaller CPM software vendors to watch

Independent CPM software specialists offer "leading edge functionality and licensing options" and can be a good fit for organizations that need special attention or simply aren't interested in dealing with the big boys, according to Gartner.

The newest addition to this year's CPM Magic Quadrant is independent software vendor KCI Computing Inc. The company says its Control product uses relational technology to unite financial and operational data, ultimately giving users a more cohesive view of information needed to make decisions and align strategy.

CPM software vendors Tagetik and Longview -- which was acquired by Exact in 2007 but remained largely autonomous -- also rated well in the Magic Quadrant report.

"Those two organizations have good vision, strong functionality and an increasingly global delivery capability," Chandler said. "[Longview] also has some interesting innovations in the area of tax. They have a tax reporting and tax planning application which isn't really present in some of the other CPM vendors' [offerings]. That adds an edge to their go-to-market strategy.”

KCI Computing was rated as a "niche player" in the Magic Quadrant report, along with Board International, Prophix Software, Host Analytics, Bitam and Winterheller. Longview and Tagetik were listed as the sole "visionaries." Infor and SAS Institute, meanwhile, were listed in the "challengers" section.

"Software as a Service vendors like Host Analytics, Adaptive Planning and Bitam, to some extent, are making CPM available to customers who maybe previously saw it as too expensive or too complex, or [who] didn't have the infrastructure," Chandler said.

Chandler also cautioned that there are some key issues to consider before doing business with a smaller CPM specialist. Smaller vendors are more susceptible to acquisition, for example, and they may not have the geographic reach to provide quality service in specific areas.

Leaders face questions about roadmaps

Oracle, IBM and SAP lead the CPM market, but many of their customers have concerns about the quality of support services and confusion over product roadmaps, according to Gartner.

SAP reference customers generally gave the business applications giant below-average reviews that indicated a need for improvement in the areas of service and support, according to Gartner.

"We are actively working with customers in a number of key areas and are delivering improvements to the entire customer experience as a result," James Fisher, SAP's director of solution marketing for enterprise performance management, said in an email interview.

On the plus side, Gartner reports that SAP has a strong CPM vision and a large portfolio of applications that has grown through acquisition. Last year, SAP purchased Cundus, a disclosure management software maker based in Duisburg, Germany.

"As an ultimate result of acquiring the technology and IP from Cundus, SAP will release a brand new solution called SAP BusinessObjects Disclosure Management," Fisher wrote. "We plan to announce this solution’s release in the very near future."
 


Mark Brunelli is the News Editor for SearchDataManagement.com. Follow him on Twitter @Brunola88.


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