Oracle's Insatiable Binge-Eating

[Brad Kenney]

Oracle announced early this month that it has made a deal to acquire business intelligence (BI) software vendor Hyperion Solutions Corp. for $3.3 billion. The move marks yet another chapter in a series of seemingly relentless purchases on the part of Oracle, which has announced nearly thirty such moves in the last two years.

Buying Hyperion allows Oracle to integrate yet another competitor into its software lineup and offer a wider range of analytical tools for customers looking to improve planning, budgeting and other performance management practices.

According to a letter to customers from Hyperion CEO Godfrey R. Sullivan, the deal will yield “immediate benefit to both Hyperion and Oracle customers, as the companies' products are already integrated with thousands of successful joint deployments.” However, it's worth mentioning here that Hyperion has 12,000 customers worldwide that are also jointly deployed with Oracle rivals, leaving many executives wondering how this consolidation will affect issues like service and bargaining leverage going forward.

Even those who use competitor packages (Business Objects, Cognos, etc.) should take note, as industry analysts warned that the acquisition could start a domino effect of acquisitions of the other large BI vendors by ITs "big boys" (Microsoft, SAP, IBM and HP). Although SAP announced a BI purchase of its own last month, Oracle's obviously been bellying up to the table (pun intended) with Hyperion for some time.

What do you think? Is Oracle on the verge of developing the IT version of “morbid obesity”? Does this succession of software acquisitions threaten to give new meaning to the term “bloatware”? Will another multibillion-dollar acquisition by Oracle only whet CEO Larry Ellison’s appetite for consumption? How many courses are in this meal anyway?

One thing's for certain: after so much practice swallowing large companies, even a big bite like Hyperion isn't likely to cause Oracle much in the way of indigestion...

[ARS]

it all makes me not want to invest in buying tools from companies that keep doing this aggressive expansion
what if I buy into something Oracle offers now, and they go and upgrade to something better? are they going to just up and give me the new, better tool- or make me do business with what I just bought while my competition who waited a month to invest gets a better piece of software??

[MEdTK]

I think sometimes large corporations tend to bite more than they can chew
(or swallow).
I've used both Oracle and SAP, and I have to say SAP seemed like a much better deal (as far as manufacturing is concerned-I don't know how much they cost). All the software was very complicated with a big learning curve (not
user friendly at all) but what it could do was great which
is why we upgraded in the first place.
Also, SAP had a way faster response from their customer service crew. I used to work w/ production and Customs in the US to get the right pallets loaded into the right trucks and on tight delivery schedules, and I didn't want
anyone looking at me like "what happened"?

[Brad Kenney]

Well, you can add another course to the check for Oracle, who just announced the acquisition (http://www.oracle.com/agile) of PLM software specialist Agile. The move, which boosts a previously close supplier relationship to the next (and, considering that it's Oracle, fairly predictable) level, actually makes a lot of sense for both companies, but for different reasons:

1) According to Agile's senior marketing VP Chris Farinacci, his company will benefit from Oracle's experience in integrating acquisitions, becoming part of a highly competitive software set composed of a stable of best-of-breeds.
"From the perspective of our product stack, we're already predominately an Oracle technology shop. Given the kind of environment in enterprise software, it became clear to us over the last several quarters that we couldn't go it alone as a standalone, independent company -- scale clearly matters in the enterprise software space."

2) Hardeep Gulati, Oracle's senior director for PLM (who just got a whole lot busier), says that this acquisition increases Oracle's competitive profile vis a vis SAP and gets the enterprise software giant a foot in the door with Agile's impressive blue-chip client list (http://www.agile.com/customers/index.asp). "The large, referenceable list with industry-leading companies is what makes this very attractive for us," Gulati says. Agile's apps will allow Oracle to provide end-to-end PLM to manufacturing customers like Heinz, Johnson & Johnson, Lockheed Martin and Shell, among others.

Although the Agile acquisition does patch a decent-sized hole in Oracle's product line, there's really not that many gaps left to fill, or companies left to buy (that is, without doubling down its offerings like Microsoft has done with its fourfold Dynamics product line).

Holes or no holes, I have this funny feeling I'm going to have to keep updating this blog thread until Oracle finally overtakes SAP as the biggest entity in the business software sphere (or buys SAP outright?), and CEO Larry Ellison puts the checkbook away for good.