Intelligent Enterprise

If you work in finance or IT, yesterday was a big news day, with announcements hitting the wire on changes in ownership and shifting positions in the race for BI and financial performance management leadership.

Starting off the morning was Business Objects' announcement that it will acquire Paris-based Cartesis. In so doing, the San Jose, Calif. (and originally French-based) software company will acquire a world-class financial performance management suite that will be enhanced through the addition of Business Objects' costing and profitability applications (acquired with ALG Software) and the BI suite of tools and applications. Talk about a deal! For a mere $300 million, Business Objects has improved its market position, accelerated its development pace and very shortly will be able to compete with the big kids in financial performance management. There is definitely no doubt that this is a smart acquisition; in fact, it's one that Business Objects should have done earlier instead of acquiring the much smaller and less enterprise-ready SRC. Putting that aside, Business Objects now is just as well-equipped as Cognos, Infor and Oracle – and probably better equipped than SAP!

Yesterday also was the second business day after the SEC approved the acquisition of Hyperion by Oracle. At Hyperion Solutions 2007, the company's annual user conference in Orlando, Fla., CEO Godfrey Sullivan, in front of more than 5,000 attendees, passed over the company keys, leaving it to SVP Thomas Kurian, the rising technology leader at Oracle, to lay out the Hyperion product and technology roadmap. Most market watchers in attendance expressed surprise that neither Charles Phillips, Oracle's president, nor CEO Larry Ellison made an appearance.

As Oracle soon will discover, finance-side customers, even those that are Hyperion customers, are a fickle lot when it comes to buying or upgrading their financial applications. These are buyers who require a lot of love and attention. The acquisition of Hyperion marks a critical test of Oracle's ability to provide leadership in financial performance management, which will require an effective integration of Hyperion financial management applications and Oracle BI technologies. Oracle clearly will be in a much better position after this acquisition is digested, but it also will have to ensure it will be able to balance serving the needs of finance and IT organizations, which are quite different, as well as the future growth in the operational performance management areas of sales, the contact center and the supply chain.

Finally, yesterday SAP announced at its user conference, Sapphire, that it will resell Acorn Systems' costing and profitability technology to customers. While this is a critical component of financial performance management for many organizations, it isn't anything new; Business Objects and Oracle offer a similar capability, and Cognos already partners with Acorn in many enterprise accounts.

Although SAP's acquisition of Pilot Software has been completed and it now is SAP Strategy Management, there remains uncertainty whether SAP is prepared to compete head-to-head against the new Business Objects with Cartesis, Cognos, Infor and Oracle with Hyperion for the financial performance management market. The SAP Strategic Enterprise Management (SEM) suite, a set of applications designed for finance and business management, has encountered challenges trying to gain market share in financial performance management. There's work still to be done by SAP in positioning and selling SEM for financial processes against other providers. Cartesis would have been a good portfolio addition for SAP, but now it will be a much better opportunity for Business Objects.

So shakeup was the word of the day in Financial Performance Management. After dust settles, who will the big kids be – the ones with global distribution channels, customers and revenue across the globe? Business Objects will become a legitimate competitor to Cognos, Infor, Oracle and, yes, even SAP. This leaves Longview and even OutlookSoft as potential acquisition targets for those that want to buy their way into playing in financial performance management.

What about Microsoft? Well, if you believe that the enterprise-level spreadsheet just released in Microsoft PerformancePoint is ready to manage your consolidations, planning, scorecarding, costing and budgeting when combined with the Microsoft SQL Server database and Microsoft Office for reporting and analysis, then it is a potential player as well. I am not so sure yet. So far, though, finance organizations have preferred dedicated applications and providers who can meet their direct needs.

And what will tomorrow bring? If you are in finance, sharpen your pencils and prepare for a very busy year of vendors looking to pitch their financial performance management packages. Now's the time to check who you're already paying, as you may well want to listen to that vendor talk about the future of your applications, and perhaps the company's new owner. The market will definitely continue to consolidate, so pay close attention; your future business intelligence and performance management may actually depend on the technology from these key providers.

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