No one doubts the requirement for ‘business intelligence' (BI): companies need to know who their best customers are; why they are losing money on certain products; how well they are managing their resources, and any number of other critical questions.
But the multitude of vendors that populate the BI market tend to interpret that catch-all category in order to highlight their individual strengths and play down their weaknesses. The fact is that there are so many facets to BI – query, reporting and analysis, data mining, data warehousing, analytical applications, online analytical processing (OLAP), scorecarding, dashboards, data quality management and so on – that there is barely a major vendor that cannot claim BI leadership in at least one segment.
That puts Hyperion Solutions in an interesting position. The company is the clear market leader in financial analytic applications – the kind of tools used by finance directors to report, plan, manage and budget. Elsewhere, it is only beaten by Microsoft in the OLAP market, with its 21% share putting it well ahead of any other rival. But those are two niches of BI, argue some observers. When it comes to the core BI area of query, analysis and reporting, Hyperion trails well behind Cognos and Business Objects, and by some accounts is also chasing SAS, MicroStrategy and Information Builders.
But as organisations have come under pressure to measure their internal performance at all levels and to react to problems and opportunities as they occur, BI has been cast in a much more central role – proving the basis for corporate or business performance management (CPM). And Hyperion thinks its product line up, while not always based on market-leading software, delivers most of the core components of CPM (although it prefers the BPM acronym often confused with business process management).
The combination of Hyperion's query, analysis and reporting tools with tools for scoring business activity, an OLAP engine for deep analysis and analytical applications to gauge how the organisations should react to events has given Hyperion the boldness to claim it leads in CPM. Some, such as BI consultant Nigel Pendse, are not convinced that CPM is well enough defined to represent a distinct software market category. "The buzzword may or may not remain popular for long, but Hyperion is making the most of it while it lasts," says the author of the highly regarded OLAP Report.
But for the last three years, Hyperion has been working hard to mould a single CPM offering from its three distinct product sets. The company today is largely the result of two key acquisitions: a reverse takeover of financial analytical applications company Hyperion Software by OLAP pioneer Arbor Software in 1998; and then its 2003 acquisition of query, analysis and reporting supplier Brio.
No doubt, its strength in financial reporting has earned it a solid reputation among CFOs, but in the view of analysts at Gartner, Hyperion's main challenge is to attract a wider audience that will "adopt its complete CPM suite, not just parts of it." The recent launch of its Applications Suite 4 was designed to encourage just that. For one, the Hyperion applications and Brio tools now have much tighter integration, and, for ease of use, the company has recast the core user interfaces to resemble Microsoft Office and created closer integration with Microsoft products.
"People understand and like Microsoft Office so we've tried to replicate it as much as possible. Users can develop a plan, download planning templates and develop budgets offline in Excel and then reconnect," enthuses Rich Clayton, Hyperion's product marketing VP.
This latest release is a staging post in Hyperion's longer term strategy, which it dubs Project Avalanche. This is an effort to improve the ability of its tools to link with multiple applications, a step vital to its vision of providing truly powerful CPM tools. It is scheduled for completion in 2006. Avalanche is also a reaction to the growing BI interests of business applications vendors such as SAP and Oracle.
In the meantime, if companies are going to apply BI in the wider role of performance management, then at least they should be looking at an integrated suite, says Gartner analyst Lee Geishecker. She warns that, "Mixing and matching different software technologies could be a costly exercise requiring extensive integration work."
While Hyperion looks to that bigger CPM picture, it needs to keep the revenue flowing from its historical markets. Arbor was the founder of OLAP, but in recent years Hyperion's Essbase product has been progressively losing market share to Microsoft even as revenues from the OLAP market are set to surge by 15% for at least each of the next three years.
Apart from its low cost, Microsoft's OLAP offering has been well accepted by application providers who do not regard Microsoft as a direct competitor in analytical applications. That is just one more reason Hyperion sees CPM as its chance to be a market leader again.