Oracle’s purchase this month of business intelligence software vendor Hyperion Solutions for US$3.3 billion may look like a beneficial investment for the ever-expanding firm. President Charles Phillips, in the days after the deal was announced, let it be known that the addition of Hyperion’s planning and budgeting products will bolster an area in which Oracle “wasn’t very strong.” That’s great news for Oracle shareholders, but the effects this deal will have on users of both companies’ offerings, and for the BI space in general, might not be all that positive.

The most obvious concern for customers revolves around the consolidation of the BI market and the whittling away of competitive forces that a reduction of players in the market invariably brings. The equation is simple: The greater the number of competitors a company like Oracle has, the more accountable it will have to be to the installed base, lest they grow displeased with customer service levels or the company’s technological roadmap and begin to seek out other offerings.

On the flipside of that equation is a scenario that sees few competitors operating within a market. This means fewer vendor choices from which IT decision-makers can choose. With Hyperion out of the picture, Oracle can breathe that much easier, secure in the knowledge that yet another player out on the BI landscape has been gobbled up and will no longer be nipping at its heels for market share. However, for the customer looking to make better sense of its data, having fewer products to choose from means potentially being pigeon-holed into products that it might not have decided to go with had there been more suites from which to choose.

Another paradigm exists in these situations that is similar to responsiveness by governments to their constituents: The larger the area of representation, the lower the degree of contact between voter and elected official. It’s harder for Joe Voter to sit down with the prime minister for a chat than it is for him to do so with the mayor of his town, for instance. In this case, Hyperion users have now been brought into a much larger family, and concerns among them about customer support and service have to be given credence, until Oracle can prove to them that these aspects of doing business won’t be affected.

Oracle’s move may work out fine for Hyperion clients, but for now at least, they can be forgiven for being a tad skittish about what’s next.

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