Smorgon Steel gives Oracle-Hyperion deal thumbs-up

Hyperion customers in Australia have warmly welcomed Oracle's acquisition of the business intelligence vendor, but some still have concerns about the rapidly consolidating market.

Oracle announced its US$3.3 billion acquisition last week. Hyperion specialises in financial applications that analyse business data such as sales history.

One locally based company taking note of the acquisition is steel manufacturer Smorgon Steel. Already an Oracle (database) and Hyperion user, the company was generally upbeat about the acquisition.

"It's definitely a good thing," said Smorgon application services manager John Earle.

"We're very happy with the support we get from Oracle, both for ERP and database. So if that's going to extend [to Hyperion], that's terrific."

However, taking a wider industry outlook, Earle said he was concerned about consolidation in the BI market.

IBM, Microsoft and Oracle were the main players in the market, according to Earle, which left an uncertain future for users of other vendors' products.

Smorgon uses Business Objects' business intelligence suite, in addition to Oracle and Hyperion.

"So we're a bit [caught] in the middle of this," he said.

"They're not in this picture," he said, referring to Business Objects.

Earle said he also expected Cognos to eventually be acquired by one of the big BI players.

Smorgon Steel has offices throughout Australia, Asia and the US, with over 5,000 employees and more than 30,000 active customers in total.

Rob Mackinnon, an analyst with consultancy IBRS, said there was valid reason for concern.

"It's not clear what the landscape will be in six to 12 months time," he said of the BI market.

"The element of risk for integration increases as time goes by. That's where I would think Oracle is heading, with total vertical integration for Oracle customer longer-term."

For Hyperion and Oracle customers though, how Oracle will integrate Hyperion into its product set could also pose challenges, according to Mackinnon.

Hyperion offered strong products, he said, with some features that were market leading in the master data management space.

"[Oracle] may well find the toolset provided by Hyperion is superior to theirs in the BI space and ultimately there has to be some sort of rationalisation," he said.

Another customer noting the potential for this problem is Fosters Group.

The brewer recently redesigned and rebuilt its Hyperion chart of accounts and Hyperion Enterprise database. Both are used for statutory and management reporting across Fosters internationally.

In addition, the Australia-based businesses implemented a simplified Oracle chart of accounts.

If Oracle does decide to supersede some of its existing products with Hyperion's, this could cause issues.

"While at this stage we have no plans in place for further development, the acquisition may impact our future planned developments," said James Hicks, business reporting project manager, Fosters Group.

Hicks said Fosters was keen for Oracle to extend Hyperion's Financial Data Management tools, which the company recently deployed.

However, any loss of Hyperion technical support would be a concern.

"The technical support around Hyperion FDM is critical for continued business streamlining," he said.

Other Hyperion customers in Australia include Billabong, most of the big four banks, and the University of Sydney, said IBRS's Mackinnon.