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Post-call Recap on the Oracle-Sunopsis Buy

I sat in on the conference call today to hear what they had to say. My summation: underwhelming. It was a strange call. A fair number of people dropped off early. I was going to, but I wanted to see if anyone asked interesting questions. One or two, but that was it.

I was left with the impression that Oracle still hasn't got its act together and doesn't understand the integration market. They just understand that they need something that works sort of like, I don't know, SAP Netweaver?

It looks to me like maybe Fusion was stuck in a rut, and pressure was building to do something, so they went out and bought Sunopsis. The SOA/EAI side of the Sunopsis product line makes sense for Oracle. The ETL side of Sunopsis makes little sense, other than the perception that it deals better with heterogeneous sources and targets.

The marketing messages around the call were related to Oracle's applications, and how they needed something to fill in gaps. On the data integration side, they need an EII product to complement OWB. They need to fill some SOA and data synchronization gaps. They need to rename OWB and put some money into a reasonable set of native connectors.

I expected some insight into an integration strategy. Instead, we were treated to a display of the obvious. Metadata driven ETL good. Custom coding bad. It was actually hard to take, which is why several folks left the call early.

I suspect that Fusion is being managed by people whose experience in the integration space is limited to old-style EAI products. This was demonstrated when they wasted time explaining how reusable logic in the middle with connections to sources and targets was better than writing code at each end of a pipe.

The more I reflect on Oracle marketing, their inattention to the integration market, and their seeming inability to manage Fusion, the more annoyed I get with them. I think they see Netweaver and want to make something similar. The difference is that SAP has a uniform set of applications while Oracle has a mass of unrelated technologies. Fusing all those applications together is going to be more painful and expensive than they've been promising.

Oracle and Sunopsis?

Oracle announced their intent to buy Sunopsis. Ironically, I was thinking today what a great job the Oracle Warehouse Builder team did with the latest release of OWB and how it's better than many of the ETL products I've evaluated.

At the next TDWI conference I have both Oracle and Sunopsis in the ETL evaluation session. Looks like I'll be working on a lineup change for future shows.

Oracle is ending up with an integration product stew similar to IBM's, with multiple overlapping products positioned in the integration space. They're pushing much of it into "Fusion" in the same way IBM puts the "Websphere" brand on all their integration technologies. Application servers, middleware, ETL - what should a customer do?

What does Sunopsis have that Oracle might want? Why isn't OWB a part (or basis for some of) Fusion? One of the reasons the last release (Paris) of OWB was so late was because Oracle was redirecting labor last year from OWB to Fusion.

In the ETL space, OWB and Data Conductor are similar since both leverage the database to do transformations and address performance needs. Sunopsis also sells an EAI product positioned as an SOA middleware platform. Oracle was somewhat lacking in this space, even though they have both middleware and application server technologies. My suspicion is that this is the more important asset that Sunopsis brings to Oracle.

There's also the market perception that OWB only works with Oracle. It works with other databases as both sources and targets, but you still need an Oracle engine. The Sunopsis products are database-independent and offer connectivity to more than what OWB handles in native fashion.

OWB also suffers from a positioning problem. It should have been renamed and repositioned as a data integration tool, rather than locked in the data warehouse space. Oracle has never had stellar marketing, with OWB as another example. Buying Sunopsis gives Oracle a better positioning in the ETL space, as well as increasing their European market share. I think these issues are relatively minor compared to what Oracle needs in the Fusion space

Finally, a story about Oracle. The company used to be known for its highly competitive internal culture with multiple development teams working on almost identical projects. There are stories of managers going away on vacation and returning to find their office moved and their team working in another group or their project disbanded. Can you guess where the OWB product manager was last month? I'm sure it's just a coincidence.

PS. All your acquisition questioned answered here (pdf). There's actually some reasonable information on things Sunopsis can bring to the party.

Open Source BI: The Best Things in Life Are Free

A lot of people hearing about open source BI ask me questions like "How can they be viable companies if they give away the software?" or "How do they make any money?" I think the real question should be "How long can software companies in maturing markets continue to produce software with the existing price structure and stay in business?"

I decided to answer those questions in a column at DM Review by analyzing a BI vendor's financials and making them into an open source company:
"To get to the bottom of the argument, look at an anonymous healthy BI software company. Company X is a fairly typical BI provider that makes most of its revenues through the standard means of licenses and support, with a little services thrown in on the side. Figure 1 shows their revenue breakdown by percent and by dollars."
For a reason I don't understand, they made the examples I used anonymous. Company X was Cognos, and I took the numbers straight out of their public financial statements on their web site.

The result is that with relatively reasonable estimates, the company is much smaller but still profitable. I expect that in five years time, as consolidation in the BI industry continues, the marginal players in the market are going to have to find ways to stay in business. Open sourcing their software is one avenue. Read the rest of "The Best Things in Life are Free"


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