While analysts say a large part of Oracle’s US$3.3-billion acquisition of business intelligence (BI) vendor Hyperion Solutions earlier this month was about building market share, at least one Hyperion customer has no desire to be fused into Oracle’s world.
Hyperion’s products, which include financial planning tools and a powerful online analytical processing (OLAP) engine, will complement Oracle’s family of BI software, which it began to build out early last year, Oracle said.
The deal is Oracle’s latest in a spree of acquisitions that have included business applications vendors PeopleSoft Inc. and Siebel Systems Inc. The vendor will extend its portfolio of database, applications and middleware products to include one of the broadest sets of business intelligence tools in the industry, company executives said.
The acquisition news was “quite shocking” for Gary Calcutta, a business analyst with SaskTel. The Saskatchewan-based telecommunications company has used Hyperion’s BI platform for more than 10 years.
At this point, Calcutta said there just isn’t enough information, but he wants to know what Oracle’s plans are for the Hyperion product line, and specifically the BI tools that SaskTel has been using for everything from reporting and analysis to operational monitoring and dashboarding.
“It’s a feeling I get that they wanted [Hyperion] more for the financial products,” said Calcutta. “It looks like the BI products were more secondary.”
Calcutta said that as SaskTel has expanded its BI platform over the years, they have looked at Oracle’s offerings and weren’t too impressed.
“[Oracle] didn’t fare well at all, unfortunately,” said Calcutta. “They’ve got not-bad functionality but ease-of-use was really poor. It was not an easy tool to use.”
SaskTel will be sending a staffer to Hyperion’s annual user conference in April and Calcutta said they’ll be looking for more information on the future of the toolset. He added, though, that he has no interest in moving to Oracle’s Fusion platform.
The Hyperion purchase was no surprise to George Goodall, a senior research analyst with the London, Ont.-based Info-Tech Research Group. He said it’s no secret that Oracle is on an acquisition spree to grow market share, and the BI market is particularly ripe for consolidation.
“This is really the first strike in what is going to be a wave of consolidation in BI,” said Goodall.
He said the Oracle move will put pressure on other players in the BI space, particularly remaining pure-play BI companies like Micro Strategy and Ottawa’s Cognos.
“The concern, when you look at this kind of consolidation wave, is that Cognos may be the ugly girl at the dance,” said Goodall. “We’re really not too sure what Cognos can do in this space, although it’s still very early days.”
For its part, Cognos is putting a positive spin on the news. In a statement, Cognos spokesperson Les Rechan called the Hyperion acquisition “a game-changing event for our market” that he said opens up new opportunities for the company.
As one of the few “pure-play” BI vendors remaining in the market, Rechan argues Cognos’ platform independence and performance management focus will allow it to be more innovative and responsive to market change.
While a large part of the acquisition is about adding seats, Info-Tech’s Goodall said Hyperion also shores up what has traditionally been a weak area for Hyperion: business process management.
As for Hyperion users concerned about the future of their platforms, Goodall said Oracle has learned from earlier acquisitions such as PeopleSoft and has become better at managing user concerns.
With Oracle’s Fusion integration project slowing, Goodall projects it will be some four to five years before Hyperion is integrated into the Oracle platform.
One of Oracle’s larger competitors in the space, SAP AG, said in a statement that the Hyperion acquisition shows that Oracle, unable to grow its market share on its own, continues to “resort to” buying customers.
“This latest acquisition only further muddies Oracle’s already cluttered application landscape,” said Steve Bauer, SAP’s vice-president, global communications.
“The question that needs to be asked is: Has Oracle’s acquisition strategy actually benefited the user?”