Oracle's Larry Ellison confirmed his reputation as the software industry's Ghengis Khan with a $3.3bn swoop for Hyperion Solutions, a pillar of the corporate performance management and business intelligence scene. John Stokdyk reports.

Oracle made a cash offer of $52.00 per share, valuing Hyperion at roughly $3.3 billion. The deal is expected to complete in April, Oracle said.

"The acquisition of Hyperion makes Oracle the category leader in the high growth enterprise performance management market," claimed Oracle CEO Ellison in the company's press announcement [1].

"Hyperion's EPM [enterprise performance management] software coupled with Oracle's Business Intelligence (BI) tools and analytic applications form an end-to-end performance management system that includes planning, budgeting, consolidation, operational analytics and compliance reporting."

If and when the deal goes through, it will solidify the ERP and BI market into three main camps: Oracle, Microsoft and the others - notably SAP and BI specialists such as Cognos and Business Objects.

Hyperion is reported to have held abortive discussions with Business Objects, but already had a working relationship with Oracle as an Oracle Partner. The product families have close integration links and the companies already have a shared user base of more than 4,000 companies

Within Oracle, however, the motivation for the Hyperion acquisition appears to be "get SAP".

"Hyperion is the latest move in our strategy to expand Oracle's offerings to SAP customers," explained Oracle president Charles Phillips.

"Thousands of SAP customers rely on Hyperion as their financial consolidation, analysis and reporting system of record. Oracle already has PeopleSoft HR, Siebel CRM, G-Log, Demantra, i-flex, Oracle Retail, and Oracle Fusion Middleware installed at SAP's largest ERP customers. Now Oracle's Hyperion software will be the lens through which SAP's most important customers view and analyse their underlying SAP ERP data."

On the technical front, questions will be asked about the Essbase multidimensional database, which Hyperion acquired in 1998. Along with Applix's TM1 system and latterly, the Analysis Services module in Microsoft's SQL Server, Essbase is one of the main data warehousing systems used for the online analytical processing (OLAP).

Oracle introduced its own OLAP system in 2004 and will have to make the strategic decision whether to maintain it as a separate platform to Hyperion's product and customer base, or as it has been doing with its PeopleSoft, JD Edwards and Siebel acquisition, attempt to fuse them into a single entity.

In an FAQ [2] on its website, Oracle stressed that the two companies' products were complimentary and that the strategy was for Hyperion to extend its reach into non-Oracle environments. Hyperion's current product plans will continue as currently contemplated, Oracle said.

Within minutes of the bid announcement, Cartesis chief marketing officer Crispin Read dispatched an email hailing the Oracle-Hyperion deal as "good news" for his company and raising questions about the future of Hyperion applications within Oracle.

"Hyperion’s current customers should be concerned. Which products will Oracle choose for its Fusion project?" he asked, before detailing where Hyperion's products compete with Oracle's: Hperion Essbase v Oracle 10g OLAP; Hyperion System 9 BI v Oracle BI suite; and Hyperion System 9 Applications v Siebel Business Analytics, Oracle CPM and PeopleSoft EPM.