i’ve just come off the conference call led by Chuck Phillips, Oracle president and Godfrey Sullivan, CEO Hyperion. A lot of low ball questions from the financial analysts but a few nuggets emerged. Safra Catz, Oracle CFO said there is virtually no overlap between the companies and Chuck added that the acquisition helps Oracle fill an OLAP gap plus analytic applications it didn’t have. That’s interesting because Oracle has in the past maintained it is strong in these areas. Those of us who have looked at Oracle’s business intelligence offerings know better.
This acquisition puts Oracle firmly in the CFOs office and gives it a credible offering that will allow it to consolidate its position in both the database and applications areas. In the past, I’ve been sceptical about Oracle’s commitment to applications but I believe this acquisition changes the game significantly. Acquiring Hyperion gives them best in class performance management AND BI capability at a stroke. It creates disruption for Cognos and BusinessObjects but whether it creates a significant challenge for SAP is an intriguing question.
SAP sells more than $1 billion a year of Oracle databases and while it has open source alternatives, the facts of business life dictate that Oracle is the large enterprise database of choice. There are plenty of SAP shops which use Hyperion products. The acquisition opens the door directly to Oracle sales people which is bound to represent a threat, something Chuck referred to in prepared remarks. SAP doesn’t usually make strategic acquisitions of this kind so in my opinion SAP will have to move quickly to consolidate its position with Business Warehouse customers.
The big bonus for Oracle though is that for the first time, it can offer applications that have genuine business value. I’ve long held the view that ERP is only a cost reduction measure. BI and performance management are value generators. From that perspective, this is a logical addition.
PS: don’t be surprised if Cognos comes under the acquisition spotlight.
