Oracle Foretells Further Consolidation

Planned acquisition of Hyperion seems part of the software giant's plan to take on SAP.
Stephen TaubMarch 1, 2007

Finance executives who are contemplating big-ticket technology purchases are casting an eye at further consolidation in the enterprise software market.

Oracle announced on Thursday that it has agreed to buy Hyperion Solutions for about $3.3 billion in cash, or about $52 per share. In a statement, Oracle chief executive officer Larry Ellison proclaimed that the acquisition will make the company “the category leader in the high-growth enterprise performance management market” by coupling Hyperion’s EPM software with Oracle’s business intelligence tools and analytic applications.

Hyperion chief executive officer Godfrey Sullivan added, in a statement, that given the need for managers “to align operational decisions with strategy, now is the right time for Hyperion to combine with a strategic partner like Oracle.”

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In overall software sales worldwide, Oracle trails only Microsoft and IBM, according to Bloomberg. The wire service observed, however, that the acquisition is part of Ellison’s plan to target customers of SAP, Oracle’s larger rival in the market for business-management software.

Indeed, Oracle co-president Charles Phillips asserted, in a statement, that thousands of SAP customers rely on Hyperion for financial consolidation, analysis, and reporting, and that Oracle already has a number of offerings installed at SAP’s largest enterprise resource planning (ERP) customers. “Now Oracle’s Hyperion software will be the lens through which SAP’s most important customers view and analyze their underlying SAP ERP data,” Phillips maintained.

Since 2004, Oracle has shelled out a total of about $20 billion on acquisitions of rival software companies — most notably PeopleSoft and Siebel Systems — Bloomberg noted.

The deal, which is subject to shareholder and regulatory approvals, is expected to close next month, according to the wire service.