SAP Watch

Mar 1 2007   6:13PM GMT

Oracle buys Hyperion, SAP on the ropes?


Oracle's shopping spree is not over, as became apparent with today's announcement that it is acquiring business intelligence giant Hyperion. Oracle president Charles Phillips made no secret about targeting SAP.

Many SAP customers use Hyperion, Phillips said, and Oracle is achieving 'critical mass' within SAP accounts.

"Now Oracle's Hyperion software will be the lens through which SAP's most important customers view and analyze their underlying SAP ERP data," he said.

Indeed, Hyperion has 12,000 customers worldwide, including 96 of the Fortune 100 and 96 of Global 100, according to the company. Even our sister site is smelling blood in the water. 

Should SAP start sweating? Is it time to give up the organic growth-mantra and start eyeing Cognos or Business Objects for potential acquisition? SAP stock plunged at the news of the deal, but SAP itself appears unfazed. SAP spokesperson Matt Carrington had this to say:

"Oracle's strategy, limited by its inability to grow on its own, has resorted to attempting to acquire customers. This latest acquisition only further muddies Oracle's already cluttered application landscape. SAP has more than 2.5 times the market share in applications than Oracle does, and despite all the billions of dollars Oracle has spent on more than 20 acquisitions, SAP still gained 3 percentage points of market share in 2006 alone. The question that needs to be asked is: Has Oracle's acquisition strategy actually benefited customers?

SAP's focus is to deliver innovative and consistent products and results to our customers and shareholders. Our growth strategy focuses on organic growth, while we 'tuck-in' smart, well-placed acquisitions to round out our product capabilities on behalf of customers. The Hyperion deal is one more way that Oracle attempts to hide the fact that applications is not its core business, whereas applications has been, and will continue to be, SAP's core business. Oracle wants to distract the market from the real story — which is that Oracle has made no progress on applications software in 36 months, and we hear that Fusion is further delayed. In SAP's core market, Oracle is stalled with legacy applications and an uncertain future."

One thing is for sure: there is no love lost between SAP and Oracle. Stay tuned for more coverage on this as it unfolds, and don't miss our new reader poll on the Hyperion acquisition!

Matt Danielsson

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