After the months (years?) of consolidation rumors, finally something happened…. Thoughts:
Less change than you might expect
It doesn’t change the BI market share picture much, based on the latest IDC numbers, from 2005 (2006 figures presumably due out soon, not expecting any huge changes in the relative positions). Hyperion is currently #5, and Oracle is #6, and combined they would become #4, ahead of Microsoft but behind Business Objects, SAS, and Cognos.
EPM: Back to the future
A decade ago, Oracle Express / Oracle Financial Analyzer was the only real competitor to Hyperion Essbase for financial planning and budgeting. It was powerful but aging technology even before Oracle purchased it from IRI in 1995, and they stopped updating it in 2002. Oracle proposed Enterprise Planning and Budgeting (EPB) in 2004, but with completely different underlying technology. Customers howled, and many of them presumably turned to solutions like Essbase.
So In the financial planning and budgeting area, purchasing Hyperion just puts Oracle back to it might have been if it had provided a credible upgrade at the time — except, of course, there’s now clear product overlap with Express/EPB.
Ironically though, Essbase is now an aging solution itself, and will be inevitably perceived as less independent after the acquisition. And the market is moving to support the “CFO 2.0”, with fast innovation and opportunities for other vendors (e.g. Business Objects) to explain the value they can bring to the performance management/planning space.
Core BI: Ouch
Things don’t look good for Oracle/Hyperion core BI customers. Oracle already had lots of overlapping solutions, and this makes it much, much worse. It seems clear that the Oracle BI tools are to be retained, rather than Hyperion’s. Larry essentially justified the Siebel purchase by saying that Siebel Analytics was the “crown jewel of the acquisition“, and in 2Q of this year, Larry went on to say:
“In our business intelligence area, that area is really on fire for us. If you recall, we bought the Siebel analytics product, and that has become our base platform”
So what happens to the ex-Brio products that are now inconveniently integrated with the rest of Hyperions solutions? I’m sure Oracle will do a credible job trying to keep customers, but there’s only so much they can do:
- Existing customer deployments will be stalled trying to figure out which technology to invest in
- Innovation will be stalled while the various R&D teams reorganize
- Lots of Hyperion employees will decide that they don’t want to work for Oracle, and move to the remaining independents or smaller startups. The headhunters are surely speed-dialing as I write this…
Stuck with their “natural share”
Oracle has been claiming to be “serious about BI” for at least 15 years, and for 15 years they haven’t been able to break out of their “natural market share”, consisting of Oracle customers that aren’t that serious about BI, and who don’t evaluate the more powerful independent tools. I don’t believe that this acquisition will fundamentally change the equation.
Independent BI is here to stay — and thrive
There’s a clear value proposition for vendors who are focused only on BI and independent of databases, applications, middlewares, etc. Oracle made it clear that this is about them and SAP, not the customer needs — maybe it will help a few more companies choose independent companies that have their BI interests at heart.
There’s now one fewer vendor that qualifies, and the remaining independents can presumably look forward to getting some of the business from a potentially (probably?) dead-ended Brio customer base.