Oracle Hyperion Buy Pushes Right BI Buttons

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With Oracle CEO Larry Ellison's well-known love of acquiring companies and the increasing strategic importance of business intelligence, perhaps it was only a matter of time before Oracle decided to buy a BI player.

Its forthcoming $3.3 billion purchase of Hyperion, announced today, will put lots of pressure on BI pureplays like Cognos and Business Objects. It will also position Oracle squarely in the middle of what is shaping up to be a BI battle royale among the software giants.

Back in late 2005, the Robert Frances Group consulting firm predicted that only four players -- SAP, Oracle, SSA and Microsoft -- would remain standing in the ERP space by 2007. That prediction may have been a bit too aggressive, but the year is young.

Microsoft's intent to make BI a central part of the software stack has been obvious since it purchased ProClarity last spring. It also packed plenty of BI features into an update of SQL Server 2005.

Oracle recently tweaked its own BI suite by incorporating technology it had earlier purchased from Siebel Systems.

The Hyperion buy will give it a devoted base of users -- some of whom, not coincidentally, are also SAP customers. Oracle's president specifically mentioned SAP in a conference call announcing the acquisition. (We could almost picture Ellison rubbing his hands in glee.)

It will also give Oracle financial analytics tools to add to its BI mix and a sales staff used to making frequent calls on CFOs -- who are often key decision-makers in approving IT budgets.

All in all, looks like a smart move for Oracle.