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What does Oracle-Hyperion mean for SAP customers?

By Jon Franke, News Editor
07 Mar 2007 | SearchSAP.com

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When Oracle acquired Santa Clara, Calif.'s Hyperion Solutions Corp., president Charles Phillips indicated that the deal could help the Redwood Shores, Calif.-based company toward its goal of getting its products into companies that use SAP.

Although Hyperion does give Oracle a window into SAP accounts, a mass switch to Oracle isn't in the cards, according to analysts.

"Certainly, these 'prospects' will now be marketed to more directly, but I'm not sure there will be any movement on the applications front," said David Yockelson, vice president of research operations at New York's 451 Group.

In fact, Joshua Greenbaum, principal for Berkeley, Calif.-based Enterprise Applications Consulting, thinks basing a larger software switch on Hyperion would be unwise.

"I don't see what Oracle can offer [SAP customers] regarding a switch. Moving your back office from one vendor to another is expensive," he said. "Doing so to favor your high-end analytics strategy is lunacy."

However, one potential area to watch is the small and medium business market, according to Yockelson.

More on SAP and Oracle's acquisitions
See how SAP may respond to Oracle's acquisition of Hyperion

Check out the original news story on the Oracle-Hyperion deal

Read more about SAP's Pilot acquisition

"The degree to which [the Hyperion] customers comprise SMB [small and midsized business] organizations could be interesting, especially since SAP is in the midst of major change for their applications," he said. "I think this could present a good opportunity for Oracle and the eBusiness Suite."

For its part, SAP has been aware of the growing opportunities in business intelligence (BI) and analytics, according to Greenbaum.

"There will definitely be a scramble to be competitive with the Hyperion-Oracle combination," he said. "SAP will be compelled to come to market with a product to do [what Hyperion does], which SAP has already been developing for a year or so."

Yockelson agrees that the onus is on SAP to capitalize on its recent Pilot acquisition and the organic development that is already under way at SAP to produce a truly competitive set of business process management (BPM) and analytics capabilities.

The acquisition should not seriously affect the decision making of companies considering a BI software purchase in the near future.

"I don't think this becomes a 'stop what you were doing' situation," Yockelson explained. "Hyperion plays across applications and competes in the broad BI and analytics market to begin with, so SAP users considering BI, BPM, etc. were probably looking at Hyperion or the other standalone vendors anyway."

Standalone BI tools vendors, such as San Jose, Calif.'s Business Objects SA and Ottawa-based Cognos Corp., don't provide the same functionality that packaged solutions like Hyperion's do, anyway, according to Greenbaum.

"A BI tools strategy is one thing -- providing packaged analytics should be an entirely different thing," he explained.

The bottom line is that -- regardless of any other acquisitions that may happen -- customers should still put getting the best capabilities for their dollar ahead of the software provider, Yockelson concluded.

"With so many SAP customers running Oracle's database products, they don't consider a product an alternative platform just because Oracle owns it," Yockelson said. "It behooves the SAP customers to understand clearly what will be available, and when, as they make BI and analytics decisions."

Greenbaum concurred, saying, "For the companies that are looking to build the functionality that Hyperion already provides: You should be looking at packaged solutions regardless of whether Oracle or the Man in the Moon owns the vendor."



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