Is Oracle Serious About Business Intelligence?

Oracle is serious about business intelligence…this time for sure! Oracle has offered business intelligence in different flavors through different product groupings over the years. But it’s been a little confusing.

A personal example illustrates the market confusion at times on Oracle’s BI offerings. I requested a customer presentation and demo last year with Oracle for one of my clients.  Oracle sent seven people representing different product groups, which outnumbered the three customers at the meeting. As the meeting got underway it was clear that the seven Oracle representatives had not worked on a coordinated message.  Then their demo crashed.

Hopefully the new announcement will clear things up a bit. The recently announced Oracle Business Intelligence Suite has three editions that are targeted geared for different types of customers:

Ÿ Oracle BI Suite Standard Edition One for the small-to-medium (SMB) market

Ÿ Oracle BI Suite Standard Edition (SE) for traditional Oracle environments

Ÿ Oracle BI Suite Enterprise Edition (EE) for heterogeneous environments

The announcement has generated a wide variety of energetic opinions. No one is indifferent to Oracle.  Some industry and financial analysts predict Oracle will eventually dominate the BI marketplace and successfully displace BI pure-plays such as Business Objects, Cognos and Hyperion. Others liken Oracle, and its founder Larry Ellison, to an obsessive conqueror bent on dominating entire software markets including databases, middleware, business intelligence and applications. Many in this camp feel Oracle will not have a significant market impact with some even belittling Oracle offerings.

There are two camps regarding Oracle (and similarly to Microsoft). Either you are loyal user of their products (you might grumble about them but they work) or you hate them. Any time a company gets large or dominates a market then you get these reactions. Oracle’s acquisition of Siebel, PeopleSoft (who bought J.D. Edwards), Retek, ProfitLogic and many others, along with Ellison’s comments on the future of the software industry, further feeds these impassioned feelings.

Putting feelings aside, will the Oracle BI initiatives impact you?

It is best to review these initiatives from two perspectives: the enterprise application and business intelligence marketplaces.

From an enterprise application market perspective Oracle is just reacting to SAP at the large enterprise market and the evolving offerings from Microsoft in the small-to-medium markets. All three vendors are expanding their application footprints across business functions (finance, human resources), business processes (customer relationship management (CRM), supply chain management (SCM), budgeting/forecasting) and industry specific applications. All these applications need reporting and analytics and it is a common lament of customers that these capabilities fall short of their expectations.

It was a natural for these vendors to start offering data warehousing and business intelligence capabilities as extensions to their application offerings. Also naturally, as corporate performance management (CPM) applications using BI/DW has emerged, enterprise application vendors have offered their own CPM offerings. These vendors have partnered with the pure-play BI vendors to offer BI, DW and CPM capability but there has been a trend for the application vendors to offer these capabilities with their own tools rather than their partners. This is not a surprising development. There is sometimes a thin line between cooperation (partnerships) and competition with the ultimate motivation being market share and revenue.

The bottom line in the enterprise application marketplace is that Oracle is a player and will have an impact BUT it is limited (and this limit is very large) to Oracle/PeopleSoft/JD Edwards/Retek/etc. customers. Just as SAP and Microsoft customers will have a tendency to try out their enterprise vendor’s offerings in CPM, BI and DW so too will Oracle customers. The enterprise application vendors generally make their offerings in these areas very appealing to their customers. To deny this phenomenon is just not realistic.

From a business intelligence (and DW/CPM) market perspective, the market reaction to Oracle’s BI initiatives is probably more timid. Despite the technical merits of Oracle’s BI tools or their installed base of customers, they do not get the industry mindshare or respect of Business Objects, Cognos or Hyperion. All these competitors have expanded over the last several years their product offerings, either through acquisitions or organically grown products. All of them are offering CPM applications and operational BI solutions (usually in cooperation with enterprise application vendors.) Most large corporations have BI tools from several BI vendors deployed and also have their enterprise vendor’s offerings. Despite the industry push for BI consolidation within corporations, most new BI projects are oriented towards new business initiatives rather than an IT-focused BI consolidation project.

In the short-run it will be difficult for Oracle to significantly change perceptions. This will be further complicated by the large-scale transition or migration that Oracle applications and tools will go through over the next several years. This does not mean that the changes are negative, but uncertainty always accompanies these types of transition. This uncertainty makes it difficult to change market perceptions. In addition, the BI vendors have all gone through their product transitions and the market has more definitive perceptions of their products. The BI vendors are not standing still and are continually expanding and improving their offerings.

Is there a compelling reason for customers to switch from their successful implementations using such vendors as Business Objects, Cognos, Hyperion or MicroStrategy? At this point, it would be difficult to make a compelling case to do so.

Bottom line: Oracle’s BI initiative will certainly have a significant impact on their enterprise application customers, but will have a more timid impact on corporate performance management, business intelligence or data warehousing projects.

Comments

[Nenshad Bardoliwalla]

Hi Rick,

Great insight from you on this topic. I argue many of the same points in my two posts on my blog:

http://bardoli.blogspot.com/2006/04/oracles-inability-to-focus-and-execute.html

http://bardoli.blogspot.com/2006/04/contrasting-oracles-bi-strategy-with.html

Would love to get your perspective on my views as well.

Thanks,

Nenshad