Oracle's Hyperion Deal Puts Users on Guard

Some fear loss of leverage, decline in service and longer upgrade cycles

Oracle Corp.'s purchase of business intelligence vendor Hyperion Solutions Corp. will likely benefit Oracle, but Hyperion customers could experience a decline in service and end up with less negotiating leverage, some users and analysts said.

Oracle last week agreed to buy the BI tool maker for $3.3billion in cash.

Bart Klein, vice president and manager of application development at UMB Financial Corp. in Kansas City, Mo., said Hyperion is the latest of the bank’s best-of-breed vendors to be snapped up by Oracle.

The bank, he said, also uses Siebel Systems Inc.’s CRM software, Stellent Inc.’s content management tools and Versatility Inc.’s call center products, all of which have been acquired by Oracle in recent years.

“What is next?” Klein said. “While [it’s] not our intention to put all of our technology investments in the hands of a single vendor, the consolidation of the industry has led to precisely that. I am very concerned that businesses will lose leverage as a result of this continued consolidation of major technology solutions.”

David Dowling, Hyperion Financial Management administrator at Flint Group, an Ann Arbor, Mich.-based supplier of printing inks, plates and pigments, said he also has concerns about the deal. “As Hyperion has grown as a company, their customer service and support has declined,” he said. “I think this will be a step in same direction.”

In addition, Flint Group now runs Hyperion’s financial management software on Microsoft Corp.’s SQL Server, and Dowling said he is concerned that Oracle will force his company to move to its database.

On the other hand, Diane Maluzhinsky, a financial specialist at General Dynamics Land Systems Inc. in Sterling Heights, Mich., applauded the move. Her company, which designs and builds land and amphibious combat systems for the military, has been using Hyperion’s Essbase product for eight years, she said.

But because the organization is also a heavy user of Oracle’s ERP applications, Maluzhinsky said, she has continually had to justify the use of Hyperion’s online analytical processing tool over Oracle’s.

“Oracle has its own OLAP product, but it didn’t stand a chance against Hyperion,” she said. “It didn’t have the strength Hyperion had.”

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