Oracle Acquires Hyperion to Deepen Financial CPM Portfolio

| March 2, 2007 | Data Management | Competitive Intelligence Report

| Analyst: James Kobielus

Current Perspective: Positive
Vendor Importance: High
Market Impact: Very High

Event Summary

On March 1st Oracle announced that it has agreed to buy Hyperion Solutions Corporation, a global provider of corporate performance management software solutions, through a cash tender offer of approximately $3.3 billion. With this acquisition, Oracle will add Hyperion’s customer base, consisting of more than 12,000 customers worldwide, including 91 of the Fortune 100, to its own. Hyperion will also add complementary products to Oracle's BI/CPM product family, including an enterprise planning system, financial consolidation products, a multi-source OLAP server, operational analytics, and compliance reporting.

Analytical Summary

• Current Perspective: Positive on Oracle’s acquisition of Hyperion, because, with this move, Oracle is considerably expanding its share of the financial CPM market and strengthening its best-of-breed status in BI, CPM, DW, DI, and MDM.

• Vendor Importance: High to both Oracle and Hyperion, because the vendors clearly recognize that comprehensive SOA-enabled BI/CPM suites, especially those that provide financial planning, analysis, budgeting, and consolidation tools, are critical to large enterprise accounts and, from Oracle’s standpoint, an absolute must for it to continue challenging SAP for leadership in the business applications market.

• Market Impact: Very high on the BI, CPM, DW, DI, and MDM markets, because the combined Oracle/Hyperion organization, fielding an integrated SOA-enabled solution stack, will be able to gain the competitive upper hand in a broad range of DM software segments.

Recommended Competitor Actions

• Rival SOA suite vendors that lack strong CPM portfolios should consider acquiring best-of-breed BI/CPM pure-play solution providers to gain a swift, significant presence in this growing segment. In particular, IBM, BEA, Microsoft, SAP, TIBCO, and webMethods should engage any of the remaining BI/CPM pure plays (i.e., Business Objects, Cognos, and SAS Institute) in merger/acquisition discussions.

• Rival BI/CPM pure-play vendors should seek out mergers, acquisitions, and/or closer partnerships with any of the SOA suite vendors, in order to be able to present more comprehensive solution portfolios that also include portals, application servers, business process management tools, enterprise service bus (ESB) middleware, DBMSs, and other features of the combined Oracle/Hyperion solution family.

• Rival MDM vendors should counter the increasingly formidable Oracle/Hyperion value proposition by enhancing their packaged offerings and domain data models that address financial data consolidation. At the same time, MDM vendors such as IBM, Teradata, TIBCO, SAS/DataFlux, and SAP should consider acquiring financial CPM vendors and leverage their tools and expertise to make a more aggressive attack on the financial data hub market.

• DQ tool vendors, such as Harte-Hanks Trillium Software, Innovative Systems, and DataMentors, should approach the combined Oracle/Hyperion to propose a merger, acquisition, or partnership that can help the software powerhouse to field a feature-complete MDM product portfolio.

Recommended End User / Customer Actions

• Existing Oracle customers should welcome the Hyperion acquisition as a positive move, in that it deepens Oracle’s product portfolio in financial CPM and MDM. However, customers should not necessarily give any greater weight to Hyperion offerings in BI, CPM, DW, DI, or MDM simply because Oracle has announced an intention to acquire that firm. Oracle will very likely maintain Hyperion as a semi-autonomous product group for several years and only gradually converge that vendor’s offerings into the Fusion Middleware suite.

• Existing Hyperion customers and partners should react to the Oracle acquisition positively, but with their final judgments withheld until the deal closes and the combined vendors announce their joint roadmap. Fortunately, initial indications are that Oracle will assimilate Hyperion without significant disruption to that vendor’s ongoing product family, development plans, sales and support organizations, and partner ecosystems.

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