November 24, 2009: PWC acquires Paragon
Those in the Oracle EPM areas in Europe & Asia knew of Paragon. With close to 100 employees, they were a significant player in the UK, Turkey, and Singapore markets. It's not known how many of Paragon's employees made the transition to PWC, but press releases seem to reflect around 40.
March 29, 2010: Perficient acquires Kerdock
Kerdock was a major, long-standing Oracle BI/EPM vendor dating back to roughly 2002. Based out of Houston, they had close to 65 employees at their peak. When they were bought last year by Perficient (a public-traded company - NASDAQ: PRFT - with about 1,400 employees), they had roughly 45 employees and about $8MM in annual revenue. They were bought for $6MM (of which $3.4MM was in cash and $2.6MM in PRFT stock).
May 4, 2010: Idhasoft acquires TLC Technologies
TLC is a long-time Oracle EPM partner based out of Pennsylvania. Though they dated back to the late 90's, they were never that large. Last year, a controlling interest in TLC was acquired by Idhasoft (through their Prism Informatica subsidiary) for an undisclosed sum.
If you hadn't heard of Meridian when Edgewater acquired them, you weren't alone. They were only a few years old (and they were pretty small) but they had begun developing a reputation as a Hyperion Strategic Finance implementer that was able to compete with the focused expertise of BlueStone. We'll never know if they would have fulfilled that promise of HSF experience, though, because they were acquired too early on by Edgewater. They did have several former Alcar executives (the company that became HSF) on their leadership team (including Alcar's former head of services, Ricardo Rasche), so their acquisition was significant.
August 31, 2010: E&Y acquires Global Analytics
Global Analytics, as you may recall, bought Narratus (the former "Data into Action") a couple of years ago and in 2010, they were gobbled up themselves. Largely through the strengths of Hyperion installation expert, Bill Beach, Global Analytics had developed a reputation in the Hyperion infrastructure world. For a time, they were one of only 5 companies (interRel was one of the others) with a significant infrastructure practice around Hyperion which included them subcontracting to other larger global systems integrators. They had several areas outside of Hyperion, and my guess is that's why E&Y bought them in 2010. The small size of their Hyperion practice doesn't seem like it would have warranted E&Y's attention. Though maybe this should have been a predictor of the acquisition of ISA?
October 21, 2010: IBM acquires Clarity
In my opinion, this was the most significant acquisition in the Oracle EPM, Hyperion, and Essbase world in 2010. Clarity Systems out of Canada (same place my high school girlfriend lived, by the way) was the first substantial partner to build a pre-packaged budgeting solution on top of Essbase that way pre-dated Hyperion Planning. Originally a consulting partner at Arbor, Clarity turned their spreadsheet-based front-end to Essbase eventually into a full-featured financial planning, consolidation and reporting product. What was once a fairly pleasant working relationship got contentious for a number of reasons including alleged licensing violations and what later turned into a compete between Clarity and Hyperion's own Planning and Financial Management products. As Clarity began to score some competitive wins over Hyperion at companies like Southwest Airlines and Alcon Labs, the relationship took a turn for the downright hostile.
Eventually, Clarity started integrating with non-Hyperion products as they continued their expansion. Interestingly, when IBM bought them last year, IBM made no secrets about their intentions to kill off most of the Clarity suite (including the planning and financial consolidation functionality). This actually makes complete sense since they already have the Cognos and TM/1 products doing virtually the same functions. So why did they acquire them? Consultant bodies to implement BI/EPM at IBM's consulting clients? Clarity's client list? Just to eliminate a competitor. None of the above. Apparently, IBM noticed a weakness in their XBRL reporting and one component of Clarity handled this functionality. Seems like overkill to me, but then I'm not a company the size of IBM.
Throughout 2010: Palladium founders leave to form other firms
As disastrous as the Hyperion/Arbor merger was back in 1998, there are many who feel that the merger of Balanced Scorecard Collaborative, Painted Word, and ThinkFast into Palladium was even worse. While I'm not one to judge, it has definitely been true that Palladium has been bleeding talent (in the Hyperion/EPM world, at least) since their founding. The last 15 months have been particularly harsh with three major group personnel departures:
- Painted Word executives including Scot MacGillivray, Jim Leavitt, Chris Boulanger, and Peter Graham all left to found Cervello. All of these people were founders and/or executives at Painted Word when it became part of Palladium. They stuck it out for a few years and then left as a group to create Cervello which seems to be doing Oracle BI and EPM consulting. I can't vouch for that personally, because I haven't run into them at all, but their departure from Palladium was definitely a blow.
- Tom Phelps left Palladium to start up ClearLine Group. Tom Phelps was the original founder of the company that later became ThinkFast (one of the three components of Palladium). Tom and his brother, Marty, founded a company that appears to be doing Oracle EPM consulting (but again, like Cervello, I haven't run into them yet). With Tom Phelps departing and the Painted Words executives departing, the only founders of the component companies that are still part of Palladium are the Balanced Scorecard guys.
- Palladium Pace team members including Dean Tarpley, Michael Wright, Carolyn Sieben, and a few others left to join Alvarez and Marsal in August, 2010. The Pace product hadn't been selling anywhere near what its creators expected and this was the final nail in the coffin of the product. While Pace is still mentioned on Palladium's website, it doesn't seem that there's anyone left at Palladium still working on the product. Palladium had been shopping around for a buyer of their Pace business unit for a while, so it's unclear as to if Palladium sold the developers to Alvarez or if they simply were hired en masse. Since there wasn't any sort of "predatory workpractices" lawsuit, I'm concluding that it was a purchase of the talent and Alvarez didn't want Pace at all.
March 15+ 2011: Ernst & Young acquires ISA
Well, I'd love to point to a press release on this, but there isn't one simply because it's not been announced yet. [Editor's Note: it is now public. Scroll to the end of the story for more.] Normally, I wouldn't do a blog entry on this until it was official, but this is the least stealthy acquisition in history. I have heard about it from no fewer than three sources at three different companies, and since offers have already been extended to the employees that are going to get them at ISA Consulting, the affected people already know. Keep watching Ernst & Young and ISA's news pages and I'm sure something will be up in the next week or two.
ISA is based out of Pennsylvania and is a very large player in the Oracle BI and EPM space. Though they do other products, ISA is still considered by many to be a primarily Hyperion partner. Based on what I've been told, E&Y is acquiring ISA primarily for their consulting expertise. While they're letting almost all the sales and back office staff go (Mitch Rubin and Cliff Matthews being notable exceptions), most all of the consultants seem to be getting offers to join E&Y. The partners at ISA do seem to be coming on as either partners or close to it at E&Y.
Even though E&Y is one of the 10 largest privately held companies in the USA, this is a significant acquisition because ISA does appear to have well over 100 people focused around BI, EPM, and data warehousing. Whether they end up putting ISA in the BI & Data Warehousing group or into financial transformation (or split them between them), this acquisition will significantly increase the number of individuals in those areas. If E&Y does manage to hold on to the talent from ISA, they will now be able to much more directly compete with Deloitte on the BI & EPM front.
I haven't heard terms of the acquisition, but since E&Y doesn't need ISA's client list or sales expertise but rather just wants the consulting bodies, the dollars are presumably based on a multiple of EBITDA. Based on other similar deals in the last year, I expect the multiple is 6.5 times 12-month EBITDA (give or take a factor of 1.5). If anyone knows any different, by all means, either shoot me an e-mail (I'll keep you anonymous) or post it in the comments to this entry.
Who's Next?
If you go way back to my posting from January 5, 2009, I offered up this list of potential targets for acquisition:
One could speculate that it might be interRel, PII, Kerdock, Global Analytics, US-Analytics, Analytic Vision, HCG, TopDown, or even the Hyperion arm of Palladium, but it could just as likely be some other tiny Hyperion vendor that's not on anyone's radar screen right now. Heck, it might even expand beyond the consulting world to one of the Hyperion software partners like Applied OLAP or Star Analytics.I then went on to say that interRel could be removed from the list. Well, I was right on Kerdock, Global Analytics, and the Hyperion arm of Palladium, so that leaves PII, US-Analytics, Analytic Vision, HCG, TopDown, Applied OLAP, and Star Analytics. I guess I would add MarketSphere to that list too even though they're obviously in areas beyond Oracle EPM. While many of these companies are too small to attract the attention of Deloitte, IBM, E&Y, and Oracle, don't be shocked if one or more of them is gobbled up in the next year by an off-shore consulting firm looking to fill in the EPM/BI gaps in their offerings.
It's now almost 2AM and I have to present to the HUG group in Minneapolis in a few hours, so I'm going to post and then sleep. If I've stated anything incorrectly above, feel free to comment and please assume I wasn't trying to be malicious. It's just been a long day and this entry (essay?) was almost 1,800 words.
UPDATE April 5, 2011: E&Y Officially Buys ISA Consulting
It took a week into April, but E&Y finalized the ISA deal and announced the deal publicly. The press release states that ISA had 130 employees (I'd speculated 100+) and financial terms were not disclosed. Read more about it here.
