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.