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Oracle-Hyperion Deal, What Happens Next?

Oracle buying Hyperion has sure set the BI industry chattering, mostly because nobody predicted it. It's fairly obvious why they bought Hyperion. What's not clear is what happens next.

Oracle was buying several things:

• Best-of-breed financial and planning applications
• A solutions-oriented sales force with access to CFOs and business managers
• More revenue growth and market share.

This was about applications and minimally about BI, but the reality is that it's all about Oracle growing revenues and customer base through acquisition. The question is whether Oracle can successfully acquire companies the way Cisco managed to during their heyday. Based on the track record with other applications and the delays in product integration, it's a wait-and-see question.

What happens next is the more interesting question for all those Hyperion customers. In the short term, the Oracle fog of uncertainty will descend, resulting in the usual deal-killing slowdown that will hit Hyperion sales while Oracle sorts out the acquisition. There's a significant overlap in products, though Oracle was dismissive of some of their existing products in the press conference.

Expect the financial and planning applications to take the forefront, which means that overlapping Oracle products will be likely pushed into the background. It also means that customers of these applications (and the product engineers) should be safe, as should the sales force given their skill selling BI and planning on the business side of the corporate house.

The status of Essbase is more questionable. Oracle buried Express into the database, so it may be that we'll see Essbase dropped eventually, with features needed by the Hyperion applications migrated into the Oracle OLAP product lineup. Or it may stay where it is. I've seen arguments going both ways but my money is on an eventual end of life.

There's overlap in other areas, like master data management. Unclear whether the overlapping Hyperion or Oracle MDM products will survive. I would bet that reporting tools (mainly Brio) are dead and in the not-too-distant future. It's a no-brainer given all the other BI tools Oracle has.

Once they rationalize business practices we should seem some changes in Hyperion pricing. They're more expensive than Oracle, which might incent Oracle to keep the prices the same. I suspect they will migrate to the model Oracle follows with other product and surprise with (minimally) lower prices.

What happens to Hyperion employees is a different question. Oracle says they'll make a performance management group, and that means the Hyperion sales force stays intact. Product management / engineering employees will have a tougher time. There's a difference in culture between Hyperion and Oracle that could make sticking with Oracle an unpleasant option for a lot of these people. I haven't kept close watch on the Sunopsis employees, but I know of a few who left after that acquisition.

Overall, expect more acquisitions this year in the BI market. SAP still needs to work on this product area. Master data management is lacking at both Cognos and Business Objects and there are plenty of smaller vendors still active.

Labels: business intelligence, hyperion, oracle

Posted by Mark Thursday, March 01, 2007 7:15:00 PM | permalink |

Comments:

Oracle made a big fuss about how they were heterogeneous now following this buy and Sunopsis. I think they'll leave Oracle Express as a cheap add on to Oracle RDBMS and make Hyperion OLAP the premium OLAP solution.

Mark Rittman in his post “Oracle to Buy Hyperion” - New York Times, CNN points out existing Oracle BI is ROLAP and this acquisition gives them a good MOLAP engine, so the two products could be considered complementary, the challenge is working out how to integrate them.

# posted by  Anonymous : 12:50 PM

 

What is doubly ironic, is Hyperion really never grasped the idea (or chose to ignore it) of operating in a wider corporate data ecosystem nor could they overcome the mindset that all the information needed to stay within Hyperion…but now they will be forced to, BUT, now there are practically “religious battles” between Oracle vs. SAP vs. Microsoft

# posted by  Anonymous : 10:46 PM

 

My C Level executives are already concerned. Oracle is a database company, no matter what acquisitions they make. They destroy acquired companies and pompously belive their products are better. I know from exeperience that Oracle OLAP is second rate, Express is Slow, OFA died a slow death. If they kill essbase then my company will shop elsewhere. Oracle will not be the only game in our town. Users dont want it, C Level dosent want it, the only ones who want it are the IT folks who get kickback from oracle.

# posted by  Anonymous : 11:45 AM

 

With Hyperion they also gained a MOLAP engine that could be used to replace the Oracle Retail RPAS MOLAP engnie (used in several Oracle retail planning/optimisation prouducts).

NB Current version of RPAS (13) is all-Oracle, previous versions used a now dead bought-in product called Acumate/Acument (ex of Mars choclate, via Keenan and Lucent) as a persistence layer with lots of custom C code wrapped around it

# posted by  Anonymous : 8:36 AM

 

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