Eye on Oracle

Mar 1 2007   1:43PM GMT

Will the Oracle-Hyperion deal hurt SAP?

Derek Kuhr Derek Kuhr Profile: Derek Kuhr

The Web is abuzz with different takes on Oracle’s plan to acquire Santa Clara, Calif.-based business intelligence (BI) software provider Hyperion Solutions Corp. for $3.3 billion. But the two lines of thought on the topic that intrigue me the most have to do with (1) Oracle’s desire to get closer to the chief financial officers (CFOs) of some very large firms and (2) Oracle’s desire to steal customers away from its chief rival, enterprise resource planning (ERP) giant SAP AG.
In a conference call this morning, Oracle president Charles Phillips said the deal for Hyperion, which among other things makes BI software that aggregates financial data into handy dashboards, will make Oracle the leader in the corporate performance management (CPM) market and prop up its growing BI business. He also said the Hyperion deal will give Oracle critical analytical applications including a new enterprise planning system, a powerful financial consolidation product, a strong OLAP engine and a large field sales organization.
According to blogger Larry Dignan, the biggest takeaway from today’s Oracle-Hyperion conference call relates to Hyperion’s 1,900 strong sales force. Hyperion serves the financial analytics space, therefore that sales organization has a lot of experience dealing directly with CFOs. And CFOs ultimately make the buying decisions for their companies. During the call, Phillips indicated that Oracle may be able to build on that relationship and upsell those CFOs on other Oracle applications.
What’s more, many of those CFOs work for companies that use SAP products. Building a good relationship with them — and then upselling them on Oracle’s SAP alternatives — could eventually Oracle chip away at SAP’s customer base. (Incidentally, shares of SAP fell considerably today on word of the  Oracle-Hyperion deal, according to published reports.)
Additionally, says Forrester Research analyst Ray Wang, the acquisiton could set off a string of acquisitions in the BI space as larger vendors like IBM, SAP and HP seek to compete with Oracle’s new BI prowess. That means specialty BI vendors like Cognos and Business Objects need to watch their backs.
It remains to be seen whether Oracle’s plan will be successful. Will they find that back door to SAP’s installed customer base? Will SAP react by acquiring a BI vendor of its own? How happy will these CFO’s be dealing with Oracle now instead of Hyperion. These are all things we at SearchOracle.com will be keeping an eye on — and things we want to hear your opinion about. So post your comments here. And stay tuned for a news analysis piece on what the Oracle-Hyperion deal means for Oracle’s Project Fusion initiative. Also, be sure to take our Oracle-Hyperion reader reaction survey. We’ll likely highlight the survey results in upcoming Oracle-Hyperion coverage.

— Mark Brunelli, News Editor

2  Comments on this Post

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  • Mircea
    A good business cannot hurt anyone. As concerning the finding of the back door to SAP's installed customer base, well, I think they will need to know how to better value all the feedback they are going to get.
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  • Rene
    Has Oracle given any comment regarding the Oracle OLAP (Analytical Workspaces) versus the Hyperion OLAP? Will both products be kept? And if so what is their respective positioning? thank you
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