Oracle Buyout of Hyperion to Hasten BI Sector Consolidation

By John Pallatto  |  Posted 03-01-2007
Oracle's $3.3 billion acquisition of Hyperion Solutions, a specialist in the field of corporate performance management, has set the fox among the chickens in the broader business intelligence market.

This has long been a relatively quiet and sometimes prosperous sector of the enterprise software market, where the corporate acquisitions have been far less costly and involved larger BI players making strategic purchases of their smaller brethren.

But with Oracle in the market, the larger surviving BI players—Cognos, Business Objects and Informatica—have to start thinking about whether it's time for them start making more of their own strategic acquisitions … or even start devouring each other.

Click here to read more about Oracle's $3.3 billion buyout of Hyperion Solutions.

Another company that certainly should be reviewing its options is SAP, because once again Oracle has demonstrated that it will keep massively outspending SAP to try to build an all-encompassing ERP (enterprise resource planning) suite that can't be assailed in the market.

John Van Decker, Gartner's research vice president, says the March 5 buyout of Hyperion for $52 per share is part of Oracle's "surround SAP" strategy.

This acquisition, Van Decker said, allows Oracle to get both feet inside the offices of chief financial officers around the globe. Performance management is the branch of BI that helps CFOs determine whether their companies are achieving financial goals and operating according to business plans and budgets.

CFOs frequently use supporting data generated by performance management applications when they decide whether to approve major new corporate investments.

Hyperion had been the biggest player in the market, Van Decker said. Until recently, neither Oracle nor SAP had a performance management application within their business intelligence portfolios, he noted.

Oracle's acquisition of Hyperion comes barely a week after SAP acquired Pilot Software, a privately held developer of business analytics and online analytical processing applications, on Feb. 20.

Now that Hyperion is off the market, the surviving big players in the BI market have to be thinking about how they will react, Van Decker said. "I can tell you right now that we are fielding many calls from competitors that are now wondering how will this change the market," he said.

Read the full story on eWeek: Oracle Buyout of Hyperion to Hasten BI Sector Consolidation