In a deal expected to close sometime next month, Oracle said it would integrate Hyperion‘s business performance management software into its own business intelligence (BI) product. Oracle’s first BI product was released at the beginning of last year.The deal makes it likely that Cognos and Business Objects will either acquire a competitor or be acquired, possibly this year, said Ray Wang, a Forrester Research enterprise applications analyst. Buyers could include Hewlett-Packard and IBM.

“This is one of those cascading domino effects where you take out one of these (BI) vendors (and) the next two or three become vulnerable or become potential for acquisition. It’s too valuable a space for anyone to give up.”

Mychelle Mollot, Cognos’ vice-president of market strategy and strategic communications, dismissed such talk as speculation. Instead, she said the company believes in making its move, Oracle has taken out one of its competitors.

One less rival
“We think it significantly strengthens our competitive position in the market,” she said in an interview. “Customers are looking for a strong, independent performance management platform, one that’s open to their Oracle, their SAP, their Teradata environments.”

CIOs prefer to buy performance management software from an independent vendor rather than an applications or database provider, she said. “We can provide that. Hyperion under Oracle can’t,” she said.

Mollot also saidthat Oracle lacks a clear strategy for performance management. “We went to the market 10 years ago with a complete performance management vision,” she said. “Oracle keeps on restating theirs as they bring new acquisitions on, and we think that’s going to be confusing to customers on the Hyperion side, (and) confusing to customers on Oracle side, like their Siebel analytics customers. What about the Hyperion business intelligence? Which one is going to be the go-forward platform?

“We think it presents a new BI opportunity in the market (for Cognos) because it’s clear that Oracle is committed to this for the performance management side of Hyperion rather than their business intelligence enterprise edition, at least from the lack of talk about BI (during the announcement press conference). It’s almost like having a competitor taken out of the marketplace for business intelligence.”

The purchase of Hyperion extends Oracle’s march into applications, Wang said. SAP, in his opinion, is the loser in the deal. “SAP needs to make a move in BI or performance management. Its stated strategy to not acquire a company is going to come back and haunt them.”

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