(This blog post is part of a series on the BI and DW market consolidation. See the first post to get caught up.)
It is easy to suggest that the enterprise “stack players” – Oracle, IBM, SAP and Microsoft – will be the acquiring BI companies. But who are the hunters that are not the usual suspects for BI M&A activity?
The BI M&A crystal ball sees several hunters entering the market: Hewlett Packard (HPQ), Sun Microsystems (SUNW) and EMC.
HP has already been on the acquisition bandwagon. In a previous post I suggested that Hewlett-Packard should acquire BI/DW/DI companies to become a player in those markets. Shortly after that HP acquired a consulting firm specializing in BI/DW for large enterprises.
Although this was an excellent move, it is only the beginning if HP really wants to be taken seriously as a BI/DW player. Although HP proclaims that they are the leader in hardware for DW/BI implementations, the reality that I see with clients every day is that the hardware is basically a commodity. The really visible portions of these business solutions are the BI, DW and DI software, along with systems integration.
With their offerings being basically HW and infrastructure in the BI space, HP needs to be higher up in the food chain to be a BI player. They will need to purchase BI, CPM or DI vendors to raise the business value of their offerings.
The two other potential acquirers in the “out-of-the-box” category are Sun and EMC. Both firms have started expanding the software portion of their business by acquiring various software firms. So far, they have stayed close to home by purchasing firms that provide infrastructure (servers, networks, storage, and data center) management software. While this extends their offerings beyond hardware, they are still too tied to hardware sales to have really broken out of the iron-centric sales. In order to move up the business value chain they need to examine their transition from being hardware dominated businesses to systems integration. IBM has already made the shift first from hardware to systems integration and now they are expanding their software portfolio. These firms need to consider a different category of software to break the iron chains.
HP, Sun and EMC can be considered high-tech titans based on their history. I don’t really want a debate on whether they were, are or will be high-tech titans in the future, but they all made significant marks on the high-tech industry. All have one important characteristic in common: they are engineering-driven companies that have created excellent products with terrific execution. However, all are primarily hardware focused and hardware is becoming more of commodity.
IBM has provided the example of being able to move beyond its iron cast by shifting from hardware to professional services dominance during the 1990s. This decade they’ve been significantly expanding their software business by making several major and many smaller acquisitions. All three of the software firms mentioned should think out-of-their-boxes by expanding into business application software that require systems integration and are growth areas. DW, BI and CPM are certainly great examples – and there are other areas too.