Hyperion's fit with Fusion not entirely clear

Oracle's Hyperion acquisition has IT industry analysts trying to figure out exactly how the BI vendor fits into Oracle's Fusion plans.

This Content Component encountered an error

The question of where Hyperion Solutions Corp.'s technology fits into What isn't so clear to experts is what will become of the technology components purchase Santa Clara, Calif.-based Hyperion for $3.3 billion. Hyperion makes highly regarded business intelligence (BI), or analytical, software that, among other things, aggregates financial data into dashboards. Oracle president Charles Phillips said the deal will make Oracle the leader...

in the corporate performance management market and add significantly to its growing BI business.

"You could sit there and say, 'Well, all of the Hyperion applications can go right into the Fusion mix,' but that's not true," said Judy Sweeney, research vice president with Boston-based AMR Research. "First of all there's the architecture challenge. Second of all there's a redundancy of applications."

We want to know what you think about the Oracle-Hyperion merger!

Please take our quick, five-question survey now and we'll soon share the results with you here on SearchOracle.com!

Where Hyperion stands alone

Analysts point out that PeopleSoft and Siebel -- the biggest acquisitions of Oracle's buying spree thus far -- were never very strong players in the areas of enterprise planning and budgeting. And it's precisely these areas where Hyperion shines.

Oracle's homegrown Enterprise Planning and Budgeting offering and PeopleSoft's budgeting software never fared very well in the marketplace, according to Paul Hamerman, vice president of enterprise applications with Cambridge, Mass.-based Forrester Research Inc.

"Oracle really struggled with their budgeting capability in the past, so they were losing a lot of business to best-of-breed players, particularly Hyperion, which is the market leader in budgeting and generally in business performance management," Hamerman said. "There was a big gap there and I think [Hyperion] addresses that gap."

Hyperion is also likely to provide Fusion with strong financial consolidation management and enterprise reporting capabilities -- pieces that Oracle had been missing in the past, adds AMR's Sweeney. The analyst said many of those features stem from Hyperion's 2003 purchase of BI vendor Brio Software Inc.

"The former Brio [consolidation] pieces and the Hyperion reporting piece certainly are needed by the Oracle offerings on the apps side," Sweeney said. "Hyperion financial management and Hyperion planning also fill a hole."

Where Hyperion overlaps

But Oracle has some explaining to do about analytics, performance management and Analysts are also interested to know if PeopleSoft's Enterprise Performance Management products will become part of Fusion, given Hyperion's strong performance management capabilities.

More on the Oracle-Hyperion merger:

Will the Oracle-Hyperion deal hurt SAP?

Oracle buys Hyperion, SAP on the ropes?

Oracle to acquire Hyperion, claims BI supremacy

"There is some redundancy with what PeopleSoft had, and Oracle had claimed that they were going to bring those PeopleSoft pieces into Fusion," Sweeney said. "They've got to make some decisions on synthesizing and rationalizing all of this. I don't think it's a clear-cut picture."

Meanwhile, according to Dan Vesset, research director for analytics and data warehousing software with Framingham, Mass.-based IDC, Oracle has some decisions to make on the back end with regard to Hyperion's Essbase OLAP engine and Oracle 10g OLAP, which also overlap in some areas.

Vesset said one likely scenario will involve Oracle incorporating Hyperion's finance-related OLAP calculations directly into Oracle 10g OLAP.

"Clearly Oracle's strategy is to put as much of the calculations directly into the database as possible," he said. "I don't know what it means technically to [use] Essbase to enhance 10g OLAP, but that would have to happen I think going forward."

PeopleSoft, Hyperion users can count on continued support

Regardless of what technology ends up being a part of Fusion, experts say Hyperion and Oracle-PeopleSoft Enterprise Performance Management customers can count on Oracle to maintain its Applications Unlimited pledge and offer continued product support and innovation going forward -- if for no other reason than the fact that it's in Oracle's best interest to do so.

According to Hamerman, Oracle's long-held position has been that it will not force any of its newly acquired customers to migrate to Fusion.

"I don't think the customers are at risk. Oracle recognizes that the acquired product lines are viable businesses and they're still continuing to support them," Hamerman said. "The only potential downside I see is an increase in maintenance costs."

But Oracle would still like it if its new customers migrated to Fusion, adds Sweeney, and users can expect the company to gently nudge them to do so over time.

"Oracle has got to be very careful not to force change, but I think you'll see gradual change as the release strategy evolves and they start to embed more technology in the [Fusion Middleware] stack," she said.

After all, Hamerman said, it doesn't make sense for Oracle to risk losing maintenance fees from Hyperion's customer base by forcing too much change too fast.

"They're certainly going to support all of the products that they acquired because it's not just about the technology -- it's really about buying a viable company that has customers that renew their maintenance subscriptions every year," Hamerman said. "Hyperion has a very large customer base, but over 40% of their revenues come from maintenance."

Dig deeper on Oracle E-Business Suite

Pro+

Features

Enjoy the benefits of Pro+ membership, learn more and join.

0 comments

Oldest 

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to:

-ADS BY GOOGLE

SearchDataManagement

SearchBusinessAnalytics

SearchSAP

SearchSQLServer

TheServerSide

SearchDataCenter

SearchContentManagement

SearchFinancialApplications

Close