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It's The End Of The Business Intelligence World As We Know It

Oracle's deal to buy Hyperion Solutions is just the latest in a series of market-changing developments.
THE ACTION ISN'T OVER

For Business Objects CEO John Schwarz, the Oracle acquisition comes as a relief. Business Objects was considered a target itself--Schwarz won't comment on whether he had talks with Oracle--and that raised questions. "When we went to get down to business, the first question was, 'Who's going to buy you?'" he says.

Not that it's over. Either Business Objects or Cognos would fetch at least $3 billion from a handful of possible suitors: HP, IBM, Microsoft, and SAP. Each has been expanding its BI portfolio through acquisitions that, so far, mostly have been small. Business Objects has acquired seven companies over the past three years, including Crystal Decisions, SRC Software, and FirstLogic (see chart below).

Mark Lack, financial and analysis planning manager with Mueller Inc., a manufacturer of steel buildings and metal roofing that uses Cognos tools, says he doesn't mind that market consolidation will lead to fewer but stronger BI vendors. "You'll see technological innovations that you've never seen before," he predicts.

BI vendors are under pressure to deliver more options to customers, Schwarz says. "There's an urgency and emphasis on this technology," he says. "Most organizations are under tremendous pressure to improve their performance." Customers are asking for complete packages, he says, including modeling and predictive analysis tools; dashboards and scorecards for managing processes, workflows, and performance; and data integration tools.

Who's Buying What
VENDOR
ACQUISITIONS
SPECIALTY
Business Objects Firstlogic (2006)
SRC Software (2005)
Crystal Decisions (2003)
Data quality
Financial planning and performance management
Enterprise reporting
Cognos Celequest (2007) Dashboards and performance management
IBM Unicorn Solutions (2006)
Ascential Software (2005)
Alphablox (2004)
Metadata management
Data transformation and integration
Software for embedded analytics
Microsoft ProClarity (2006)
ActiveViews (2004)
Data analysis and visualization software
Ad hoc reporting system
Oracle Hyperion Solutions (2007, pending approval)
Sunopsis (2006)
Siebel Systems (2006)
Financial analysis and performance management
Data integration
Analytics applications
SAP Pilot Software (2007) Performance management

IBM comes to the market with a focus on its DB2 database software, middleware, and professional services. Like other BI vendors, IBM has made some gap-filling acquisitions, including Alphablox, Ascential Software, and Unicorn Solutions over the past three years. A year-old Information On Demand initiative aims to deliver information, both structured and unstructured, where and when it's needed. IBM acquired content management vendor FileNet for $1.1 billion and introduced a data integration server last October called Information Server. "I call this third-generation business intelligence," says Ambuj Goyal, general manager of IBM's information management software.

Earlier generations--query and analysis, then analytics--remain the domain of specialists such as Business Objects, Cognos, and Hyperion, he says. All three provide tools for analyzing data collected by IBM's Information Server.

Increasingly, search technology is being built into front-end analytical tools. Business Objects this month will introduce an upgrade to its flagship Business Objects XI that includes internally developed search capabilities. Cognos and enterprise search company Fast Search & Transfer have integrated their technologies, and Hyperion recently began offering Hyperion System 9 Smart Search for Google, which lets users search Hyperion's repository using the Google Enterprise Appliance.

IT'S A SLUGFEST

So who's the loser in the Hyperion acquisition? Oracle wants the world to think it's SAP.

Don't believe it, says Doug Merritt, SAP's general manager of suite optimization. SAP counts about 13,000 deployments of its own BI platform, NetWeaver BI, and 11,000 of its data warehouse, SAP Business Warehouse. The Pilot deal gives it performance management software. "SAP hasn't been asleep at the switch," Merritt says.

In an assessment of the BI market released in January, Gartner placed Oracle in the leaders' quadrant, along with the big four independent vendors--Business Objects, Cognos, Hyperion, and privately held SAS--noting the newly branded Oracle Business Intelligence Suite that came from the Siebel acquisition. SAP straddled the edge between challengers and leaders, along with Microsoft and Information Builders, according to Gartner. Says Merritt, "It's a slugfest between all of us."

With Hyperion about to disappear into Oracle, Oracle claiming supremacy, Microsoft squeezing licensing costs, Teradata breaking out of NCR, and HP plowing in, the slugfest has only just begun.

With John Foley