Oracle/Hyperion Merger - Implications To Competitors

by Boris Evelson.

A clear implication of this acquisition is for Oracle’s pureplay BI competitors: Cognos, Business Objects, Microstrategy, SAS and Information Builders, since a combined Oracle/Hyperion BI offering with best of breed components in every layer of the BI “stack” will become increasingly difficult to beat. While many of these vendors were quick to issue statements that they view this transaction as an "opportunity they intend to take advantage of" and that they remain "clear leaders" in the space, it is very clear that they are, as they should be, very concerned of Oracle's new position.

The transaction also has potentially huge implication for Microsoft, which has been giving away its OLAP product, Analysis Services, as part of SQLServer. While Oracle is also packaging OLAP (Express) with its relational database, it was always considered a lower end product to Microsoft. If Oracle decides to bundle Essbase as part of its overall database license, it could make significant cuts into Microsoft’s OLAP market share.

A curious implication is around the fact that IBM’s OLAP Acceleration (formerly DB2 Cube Views) product was originally based on Essbase.  The product never reached a significant marketshare and as a result IBM and Hyperion for a long time had a close partnership offering an integrated DB2 Universal Database (UDB) / Hyperion Essbase solution. IBM is also an authorized reseller of Hyperion Essbase. Since DB2 UDB and Oracle compete toe to toe for the RDBMS market share, it will be interesting to see if this partnership / reseller relationship will last.

The other, and probably a larger (then BI), implication is Oracle’s new position as a Performance Management (especially Financial PM) leader which puts additional pressure on SAP. While this move will do little to sway SAP ERP customers to Oracle, it will position Oracle closer to SAP customers and will give Oracle a share of the dollars that SAP customers spend on PM applications.