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Oracle Acquisition of Hyperion

What does Oracle's acquisition of Hyperion mean for business performance management and business intelligence buyers?

This article originally appeared on the BeyeNETWORK

By the time this is released, nearly two weeks should have passed since the big announcement. Although Hyperion investors are probably upset that their financial upside was capped by the overall market correction that took place during the week of the announcement, there has been much discussion on what this transaction could mean to existing Hyperion and Oracle customers and prospects. Some of the following points may be obvious, but they are nonetheless important considerations as you consider the next steps in your performance management investment:

More transactional vendors are now selling multi-platform business intelligence (BI) and business performance management (BPM). Oracle has always had BPM capabilities, but they were largely successful only with Oracle shops. SAP has an extensive BPM suite, but really only targeted to SAP customers. With Oracle’s acquisition of Hyperion, Infor’s acquisition of Extensity (Geac and Systems Union) and Microsoft’s plans for the market, most transactional vendors will have a BPM suite optimized to their applications. The remaining larger independent vendors (for now), including Business Objects, Cognos and SAS, will still take a best-of-breed approach and extend their offerings across multiple platforms. Although we can expect improvements of data and application integration with the larger transactional vendors over time, that integration will realistically take several years.

What will happen to products in the combined Oracle product suite?Oracle has tried for years with limited success to sell their independentOLAP engine and planning applications. It will be doubtful that they will support multiple OLAP engines and BPM applications in the medium to long term. In the short term, they will likely claim that all of the combined companies’ applications will be supported, but we should expect the beginnings of a consolidated product road map six months post acquisition. Hyperion’s core products have a loyal client base, and Hyperion has done a good job with product support. We can expect these products will find a permanent place in the future Oracle product suite, and also expect the gradual retirement of the less successful competing Oracle products. Hyperion has had a strong focus on integration of their offering on the System 9 platform, and now this positive progress will be challenged as the various surviving Hyperion, PeopleSoft, Siebel and Oracle products are integrated.

Prepare for battle of the giants. With Oracle, SAP, Microsoft and Infor all lined up with competitive systems, we can expect interesting positioning of these vendors among themselves as well as against the other best-in-class BPM vendors. Rumors continue about IBM’s future entry into the market, but all discussions are largely speculation at this point and are completely counter to IBM’s declared strategy of concentrating on infrastructure, not applications. The remaining independent BPM vendors are looking at this as an opportunity to aggressively market their capabilities to Hyperion and Oracle prospects, taking advantage of the distractions of the acquisition. Expect aggressive commercial offers from these players in the short term. It is a good time to be a buyer.

Expert support staff and sales changes. Looking back to the PeopleSoft acquisition as a reference, there will be staffing redundancies, and we can expect an exodus of Hyperion execs and middle managers approximately 3 to 9 months after the acquisition. Existing clients should be assertive about having an open communication channel to your support team as changes take place. If there is a particular support person that you consider very valuable, track him or her closely during the process. There may be some great resources available if you are looking to extend your internal support team.

In summary, this could be the beginning of the next wave of performance management, a single source for financial, operational and transactional systems, facilitating the success of BPM initiatives enterprise-wide. Although there will surely be some bumps on the road along the way, this is a net positive move that will help end users in the long term. On the flip side, transactional vendors' track record has not been stellar with BI and BPM applications, and it could be a tough road for customers using transactional applications from multiple vendors. Of course, there will always be a place for best-of-breed vendors with unique, robust functionality that are transactional system agnostic. Buyers should take extra caution in better documenting their requirements and future BPM road map, and also conduct additional due diligence to assure the product road map of your vendor aligns with your future needs.

The author acknowledges Nigel Pendse, author of The OLAP Report, for his perspective on this article.

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