First off it’s basically a 3 player battleground, Oracle and SAP, with IBM playing catch-up. Microsoft is on the sidelines nervously awaiting their turn to play, but way behind from a “big-business” gaming standpoint. I don't agree with some market opinions that SAP has fallen behind in terms of having an “Integrated” set of solutions. I spent 13 years within SAP and always marveled at how they always took the role of lead steer in terms of “SOA”, "Web enabled apps", "Marketplaces", "Protocol Inclusion", "Industry Packaging and Market Segments", "% of R&D Invested, and many other areas and initiatives. I continue to be amazed to see many competitors just copy and promote the same initiatives and industry buzzwords as a defensive tactic.
Over the last 5 years SAP hired thousands of people who were x-Peoplesoft, Seibel, Oracle and Hyperion folks and as a result adopted some of the incoming "Organizational Cultures" of these workforce immigrants, but mostly a couple in particular....the "Sales & Marketing" and the "Management & Control" cultures and the American philosophy of doing business. In my opinion they have a trade off of revenue & short-term profits at the cost of a significant detriment to customer satisfaction and loyalty and long term growth. The net result has witnessed a trade-off between "Substance" to "Sales" and "Long Term" to "Short Term" focus, not particularly revered German values as I understand.
This has left the two major players as virtually indistinguishable, at least in the present era.
There are two major battle fronts in the “Business Intelligence” field, the CFO, COO’s, Cxx (Business Users) & CIO (Technology Managers).
The BO acquisition...if you look at the pure numbers of BI Sales given the US$7B purchase price would have taken 10 years payback period on the basis of pure BI sales alone. That doesn't make to much sense for most finance guys. But if you factor into account the fact that within BO's installed base of approximately over 27000 customers worldwide of which approximately only 5k were SAP Joint customers, there was an opportunity to sell into the Oracle & Other ERP installed base SAP's main line of products in the ERP which more than validated the consummation of such an expensive deal.
But back to the 2 battle fronts.....
1) Data Integration:
* SAP was traditionally weak in this area. They relied upon a few different strategies over the years, partnering with Informatica, an OEM arrangement with Ascential..(which of course fizzled once IBM took over completely), and now BO's strong EIM Suite of products completes the package.
* But here we're really talking about 2 layers, EAI & ETL. With EAI, SAP partnered with WebMethods and eventually absorbed the technology with its own branded application of XI, which is now part of the SAP Netweaver Stack. WEB Server also replaced the IIS and (SAP) ITS but really had roots in InQmy.
* SAP rebuilt its platform from the bottom up, WebServer, XI, BI & KM, and on top the Portal Technology which was gained via the Top-Tier acquisition which was both Dot-Net & Java Based and quickly integrated with the Netweaver Stack. They adopted IBM's Eclipse protocol for their object based development platform and these actions took them to a lead of approximately 2-3 years ahead of Oracle with their "Fusion" or better said con-fusion created by way of the mammoth number of acquisitions, Siebel, Peoplesoft, and Hyperion. Oracle stepped up to the plate however purchasing BEA which basically unified their technology stack, but has the same pains as SAP in stitching together and “Re-Weaving” a new integrated suite of products.
* So bottom line....both are basically commodities...and both can work interchangeably with or without each other. IBM is there too.
2) Business Utilization:
* All the technology in the world is only as good as the results it achieves. At least in the minds of "non-IT" business people. The CFO's office for a very long time has been dominated by legacy accounting systems and by agnostic believers of best of breed SAP, Oracle, Peoplesoft, Seibel, Baan and many other G/L applications, but most often by a sincere belief in “do-it-yourself” spreadsheets based on light integration with MS Office products.
* When it comes to Consolidations, or Business Planning, Hyperion has held the biggest share of the market and still does from a "not broken don't fix it" standpoint. But many CFO's and companies are not happy with the entirety of integrated solutions and looking at a high TCO given multiple systems, multiple data integrations, multiple databases, and multiple BI systems and analytics as well as the SOX & IFRS requirements and increased exposure during these “high pressure” economic times.
* At the same time, the main competitor of all of these applications is not SAP Business Objects , Hyperion, Cognos, Microstrategy, Teradata,....and many many others...it's "MICROSOFT" Excel.
* So the sales pitch of the large vendors is mostly aimed against uncontrolled, dispersed, distributed, sparse, unsecured strategic data and intellectual property existing within a highly mobile workforce environment capable of disseminating proprietary intelligence and with all the portability to their favor. In other words Security. I worked within the Security Industry for 7 years and one thing I learned from this (quasi-intelligence) industry, is….It’s easy to sell fear! It’s actually good for Security selling businesses!
* The other term most likely used by BI Software Vendors and Analyst which for me is “making information ACTIONABLE”! This is so…”passé” (out with the old guard and administration!) Believe me, COO’s, CFO’s, and successful managers don’t only want information to be “actionable”, this connotes a “potential action” but is based upon the whim and slack of a “responsible” employee. That’s why we’re facing the current economic crash and debacle, because some “irresponsible” employees, managers, chiefs within the Fed, Treasury, and SEC, didn’t see the need to take action, although Intelligence was “ACTIONABLE!” My many years within the ranks of industry as chief bean counter tell me that they want information to be processed into Intelligence which initiates validation via inquiry and prescribes orders for remedy (action) bringing symptoms into a “within established parameters” equilibrium status. To quote a past COO “I don’t like being the “bad guy” always having to kick someone in the pants in order to get things done…have the system do this for me so by the time I do my rounds the managers already know what I know and have even had a chance to remedy things before I do. I’m basically a nice guy and would prefer such pro-activeness!”
* The closest thing I’ve seen which approximates anything relating to my previous point, is the integration of Business Process Management with Business Intelligence. But this is NOT on any roadmap I’ve seen. SAP’s got a whiff of this but Product Management has not yet packaged or proceeded to officially launch such an initiative and if so is keeping it under closed covers. The only thing near it is Actionable (SOA) or On-Demand products.
* Oracle, Hyperion, Cognos, IBM, are not on the forefront of this direction but are sure to follow.
So in summary, how do customers view their future investment into BI? Cautiously, they await future release dates and functionality promises, they evaluate the cost “as-is” and “to-be” versus the benefits (ROI) to be received. They evaluate the current return on their invested projects that are “productive” and whether or not they can extend out this return via corporate/entity wide absorption and utilization.
Beyond this they sift through mounds of prophetic sales people and proficient solution engineers who execute wonderful theatrics and soap operas complete with espionage, provocative relationships, romancing, and pontification, and victory parties and celebrations only to find after it is all said and done…the cold hard reality of a sobering headache…and a hell of a task cleaning up and getting things back into order.
Let’s focus on our deep rooted values and ethics…and get to work. There’s room for investment without all the hype and fear mongering, and there are sincere people out here willing to understand issues and resolve problems effectively and efficiently. CAPEX is Long Term my friends, not short term and that is what controls project spend, not your annual budgetary process which is subordinate to CAPEX funding by the board.
Happy Hunting in 2009!
Fermin F. Iduate Intelligence Advisor - Enterprise Performance Management
& Business Intelligence
Turning Point Group, LLC
8470 SW 148th Drive Miami, FL 33158
M +1-(786)-556-5415 (cell)
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http://TurningPoint-Solutions.com
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