Insights

Oracle scores an own goal as SAP BPC set to replace Hyperion Enterprise

22 Mar 2012 BPC, Business Intelligence (BI), SAP, Business, HANA, SAP NetWeaver Platform, Planning, Cloud

I'm pretty astonished at the bluntness of Oracle's statement on not developing Hyperion Enterprise further. OK, so they've had Hyperion Financial Management (HFM) for a long time as a replacement product, and under Fusion they do need to rationalise their tools, but it is bizarre timing from a market perspective for a number of reasons:

• SAP has a superior product (SAP BPC) with a clear vision that is properly integrated to their strategy and other offerings. SAP bought Outlooksoft in 2007 (was  it really that long ago?) which was already a thorn in Hyperion's side, winning deals against them particularly in planning and budgeting in the finance department, less so in broader planning and in financial consolidation. It took them a couple of years to get it migrated over to the SAP NetWeaver platform (and therefore onto part of the strategic roadmap), and since then they have been motoring. The recent arrival of SAP BPC 10 takes it to another level, and when it gets released onto SAP HANA (won't be far off I think) they will have performance that leaves the competition for dead.
• If you have SAP as your system of record then the tight integration (in and out) with the finance ledgers makes it compelling, and the tight integration with SAP's Business Intelligence strategy will likely be equally compelling for you.
• Planning, budgeting and consolidation, with full line of site, are right at the top of many companies' agendas. It is a combination of the economy driving tight financial control and accurate cash flow forecasting, and governance/regulations making tighter controls ever more essential.
• The SAP product is, as a result of this, hugely successful at the moment and has become a material part of my business. It's being bought and implemented by companies large and small across all industries and replacing Hyperion as well as other products such as Infor FDC.
• SAP and Oracle have, more than ever, decided to take each other on head to head. SAP's move into the database arena, Oracle's copying of SAP's acquisition of cloud-based HCM capability, and the tone of comments from a clearly rattled Oracle shows a battle that is going on and one that, for now, SAP is winning - SAP reported growth of 11% against Oracle's lacklustre 3%.

In my view Oracle had a good window of about four years to retire Hyperion Enterprise after SAP bought Outlooksoft (and before SAP BPC was probably migrated to the SAP NetWeaver platform) and to offer seamless migration to HFM. That window has now gone, and as organisations replace Hyperion Enterprise, if they have a system of record that is SAP, then BPC would be the obvious choice for replacement with its tight integration into core SAP (both in an out), and with the business intelligence suite. Why introduce another new product when you have the opportunity to consolidate your vendor list? Oracle claims that most organisations have already migrated; I don't know the statistics (this article suggests 50% had got rid of HE but not all to HFM by mid 2010, but my team tell me that there are plenty of Enterprise customers out there who will be troubled by this statement and looking for a safe passage to a better future.

On a personal level, I'd like to thank Oracle for its own goal here.