StarAnalytics Bought by IBM

On February 1, it was announced that Star Analytics (one of our favorite software companies in the world) is being bought by IBM (not one of our favorite software companies in the world) for an undisclosed amount.  Star, founded in 2004, made two excellent products (Star Integration Server and Star Command Center) and IBM's strategy, at the moment, is to continue the two products under IBM's Business Analytics Software group.

As  everyone knows, IBM has been on an acquisitions kick for the last 5 years particularly around business analytics.  They own Cognos, TM/1, Clarity and a whole lot of other products... or at least they bought the companies that made those products and then stopped some of those products and continued others.  Unlike Oracle that is quite good at buying companies and then immediately knowing which products they want to strategically continue, IBM can take some time to make up their mind and half the time, people internal to IBM don't know which products are being discontinued.  There are still people internal to IBM that are touting Clarity's planning and consolidations products, and those have been virtually dead since IBM first bought Clarity.

It may seem odd to some that Star was bought by IBM considering that IBM owns Cognos and Star is traditionally awesome at Hyperion integration not Cognos, TM/1, and the like.  What many people don't realize is that Star's products have been expanded beyond their traditional Hyperion roots over the last few years and now talk well to other products including relational databases.  Star Integration Server is still found almost exclusively at Hyperion shops, and one has to believe that part of the reason IBM bought Star is to be able to easily extract data from Essbase, Planning, and HFM.

Judging from IBM's announcement and FAQ on the purchase, it seems that being able to extract and control Oracle (particularly Hyperion) is the main reason they bought Star.  That makes it odd that Oracle didn't go ahead and buy them instead.  All I can think of is that either IBM offered a better price or Oracle felt they had competing products with some of the same functionality already (I'll be getting to that in a second).

So what does that mean for you?  If you bought Star's products, congratulations.  They are excellent products and I would continue using them for as long as IBM continues to support them.  If you're considering a purchase, I would wait until IBM decides what they're going to do.  At bare minimum, IBM will probably begin to favor Cognos and TM/1 more than Hyperion and for a lot of us, Hyperion expertise was the reason we bought Star's products.

If you want to consider something else, I would suggest buying Hyperion Financial Data Quality Management or Oracle Data Integrator instead of Star Integration Server and Hyperion Financial Close Management instead of Star Command Center.  They don't exactly overlap functionality-wise, but they are the closest replacements I can readily think of.  Note that Star Integration Server has some very cool extraction technologies that are patented, so any product extracting data or hierarchies from Hyperion is probably going to be a lot slower, for the time being, than Star.

We will miss you, Star Analytics.  It was a good 7+ year run, and the Hyperion world will always fondly remember your company, your products, and your employees (particularly your iconic leader, and my close friend, Quinlan Eddy).  May your staying agreements at IBM be short.

#1. Oracle Acquires Hyperion

Was there any doubt about number one? By far the most significant event of the last ten years if not the entire history of Hyperion was announced in March of 2007: Oracle was buying Hyperion for $3.3 billion US dollars. It led to a wave of consolidation activity within the next few months: SAP bought Outlooksoft (and then Business Objects when the world was underwhelmed with the Outlooksoft purchase) and IBM bought Cognos. In 2007, the three largest BI/EPM vendors were gone.

The Hyperion acquisition was one of the smoothest I’ve ever seen thanks to a couple of factors. Oracle extended offers to 92% of the Hyperion workforce so all the key personnel made it into Oracle. Oracle also put some great Hyperion people in charge of BI and EPM at Oracle including John Kopcke and Robert Gersten. While the old Oracle BI/OLAP guard was not amused, I’m sure, Hyperion provided new life to the BI group at Oracle when they were put over the top of the existing leadership (rolling up to Thomas Kurian in Fusion Middleware).

Oracle has made some great decisions since the acquisition: Essbase got its name back (may “Hyperion System 9 BI+ Analytic Services” burn in the 7th circle of hell for eternity) as simply Oracle Essbase, Smart View became the Office standard for BI products, Hyperion Planning became the standard for budgeting at Oracle, Financial Management became the strategic direction for financial consolidation, and more. The only negative things I can really say about the acquisition are the loss of the annual Solutions conference and the disappearance of the Hyperion User Groups, and by this point, I’m almost nitpicking.

Like it or not, Oracle’s acquisition was by far the most significant event in Hyperion’s decade. While I never thought I'd say this, I thank God that Larry Ellison decided to forgo buying a bigger yacht in favor of a $3.3BB EPM software firm.

Oracle - Best Ability to Execute Among EPM Suites

Gartner has released their annual "Magic Quadrant" report on CPM (Corporate Performance Management also known as EPM) suites. To the shock of almost no one, there are only three vendors in the "Leaders" quadrant which means they have high ability to execute and completeness of vision. Those three are IBM (with the Cognos products), SAP (with the Business Objects and OutlookSoft products), and of course, Oracle (with the Hyperion products).

Oracle EPM scored higher in "ability to execute" than any other vendor although SAP did rank higher in terms of "completeness of vision." The "ability to execute" category is determined largely by a customer survey, and it's interesting to note that Oracle had the largest improvement in execution of any vendor Gartner surveyed.

One might wonder why Oracle didn't fare above IBM and SAP in terms of vision, considering those vendors seem unsure as to what they're doing with their long-term EPM strategies. A clue can be found in the comments at the end of the article where Gartner mentions that no major increases in functionality were released in 2009. Further:

...There has not been any major advancement in product vision during the same time frame, and Oracle needs to show evidence of thought leadership in CPM to maintain its position relative to other megavendors and some of the CPM specialists. Its IP functionality and planned financial-close functionality partly address this.

In other words, Oracle had better keep advancing (rather than focusing on just integrating Oracle EPM with the existing Oracle products) or risk falling significantly behind on the vision front. The release of 11.1.2 (Talleyrand) and hopefully, OBIEE 11g will surely help.

IBM Buys Cognos

I awoke this morning to the news that IBM was acquiring Cognos for around $5BB. I personally wouldn't have paid a penny over $4.4BB, but I'm finicky.

This takes the count of major independent BI/OLAP/xPM vendors down to... none. (Sorry Microstrategy, but you're not big enough to register.) Who knew that in 7 months, Hyperion, Business Objects, and Cognos would all get swallowed up?

I'm torn between who will have the harder time integrating with their new company: SAP integrating Business Objects or IBM integrating Cognos? SAP has never undertaken an acquisition of the size of B.O. and SAP also isn't exactly known for making software easier to use over time. IBM has never been an apps company: they're great at middleware and server software. If I was a betting man, I'd say that IBM will do a better job with Cognos, but they'll probably kill off all the end-user-oriented applications along the way. To anyone who bought Cognos Planning, I think that it won't be long for this world. As for any Business Objects clients, pray that SAP leaves B.O. as a stand-alone company, because if SAP starts meddling, B.O. is going to lose market share faster than Lotus 1-2-3.