Over at ITBusiness.ca they’re reporting that Oracle is acquiring Hyperion for $33.3 billion. Oracle reps and other industry experts are quoted that this will position Oracle better in the Business Intelligence (BI) market next to Business Objects and Cognos. What I found odd was that there was no mention of Microsoft in the article at all.
Microsoft has been eating everybody’s lunch in the global OLAP market over the past six years or so, yet you don’t read much about it. Hyperion, Cognos, Business Objects and Oracle are all ranked #2, #3, #4 and #10 respectively. Microsoft is #1 and has been since 2002 according to the latest analysis by The OLAP Report. Take a look at the line chart below from their market share report that shows quite clearly the trouble nearly ever other OLAP vendor is in besides Microsoft.
It’s pretty clear from the line chart above who is in the drivers seat for this market.
While I get that M&A is something that’s got to be done in a market that’s in the final throws of consolidation, and Oracle is going after Hyperion for their revenue, their market share and to keep it out of the hands of others like IBM and HP, I can’t think that this is a play to try and catch Microsoft.
Since 1999 Hyperion has lost 31% of their original market share. Oracle has lost 72% in the same period. The trend was consistently down, down, down. If you don’t have a track record of winning it means it’s time to change whatever it is you’re doing because its not working. There’s no indication that either has a clear strategy for reclaiming the market. Or even start climbing. So I’m not sure where this winning insite will come from.
My opinion of what Microsoft did right is that it purchased an excellent OLAP engine first and build a platform around it whereas the majority of other vendors fell backwards into OLAP from the reporting side. Having a fast, solid and accessible engine that’s flexible to build on is key.
For the short term, Oracle will be a strong #2 in the market, but I think the key to being competitive with Microsoft will be by purchasing companies that have gotten it more right than wrong in the BI space - either Cognos or MicroStrategy.
Cognos, it seems, has always had their focus on what sells their product – great reporting. They’ve expanded their lineup since their original offerings to be a player in the complete lifecycle of BI, but their strength is in reporting. One of the biggest challenges with Cognos, and a reason why they’re having trouble gaining share, is their scalability and a reputation of being weaker in other areas of BI outside of reporting.
MicroStrategy has architected their products so it’s extremely flexible, powerful and accessible. By “accessible” I mean their API is fully exposed so you can truly create some amazing custom BI solutions. MicroStrategy’s biggest drawback is it’s price and it’s usually overkill for most businesses.
So we’ll see. I can easily see a relative unknown show up and rise up pretty quickly – especially from the open source universe. And there are promising companies like Vertica Systems that has a database that promises to blaze through data 100 times faster than database systems currently on the market. It will be interesting to watch.