Oracle Targets CFOs, SAP With Hyperion Purchase

Boosts planning, budgeting capabilities, Oracle exec says

Charles Phillips, president of Oracle, said that the company’s $3.3 billion acquisition of Hyperion Solutions will add critical analytical applications to its line of business intelligence products.

“We weren’t very strong in planning and budgeting,” he acknowledged. “We had a small product there that had not done well.”

Oracle agreed to buy the Santa Clara, Calif., maker of BI tools last week. The deal is expected to close in April.

Phillips noted that the analytical tools gained through Oracle’s acquisition of Siebel Systems early last year will remain the centerpiece of Oracle’s enterprise BI offering.

The Hyperion deal is the latest in a string of 28 acquisitions by Oracle since the start of 2005.

Hyperion said that about 12,000 customers use its software and that it employs about 2,500 workers spread over 20 countries. The company reported revenue of $765.2million for the fiscal year that ended June 30, 2006.

David Mitchell, an analyst at London-based consultancy Ovum Ltd., noted that Oracle has been trying to build out its own BI business, but its strategy and product offerings have been focused primarily on customers of its own software, Mitchell said.

“Adding Hyperion to the family makes it a best-of-breed player rather than just focusing on the traditional Oracle customer base,” he said.

Phillips said that adding the Hyperion financial analysis software to the Oracle product line will provide it with better access to corporate chief financial officers. Therefore, Oracle will be able to push “a lot of other applications and tools into the CFO’s office — mainly compliance and governance [software] that the CFO drives,” he said.

In addition, Phillips noted that because “thousands of SAP customers close their books with Hyperion products,” the deal helps to further Oracle’s goal of inserting its products into enterprises that may be using SAP wares, he added.

However, Mitchell said he doubts that the Oracle acquisition will make much difference to SAP, noting that companies make big investments in their ERP software and don’t switch vendors lightly.

In a letter to customers, Hyperion President and CEO Godfrey Sullivan said that the deal “yields immediate benefit to both Hyperion and Oracle customers.”

Oracle’s acquisition “extends Hyperion’s capabilities beyond the finance department with operational analytic applications and complementary BI tools from Oracle. Oracle customers will gain access to our domain expertise in financial management,” Sullivan wrote.

Copyright © 2007 IDG Communications, Inc.

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