SAP Does CPM: Et Tu, Oracle
SAP has fired back at Oracle, in rather short order, with the acquisition of OutlookSoft, a corporate performance management vendor based in Stamford, Conn. It looks like short order of course, as Oracle announced its Hyperion acquisition a scant two months ago. But SAP, having passed a while ago on making a play for Hyperion, has been angling for a competitive CPM play for a while. And this one looks like it could have the desired effect.
Bearing in mind that the “desired effect” at SAP is slightly different than that of Oracle. SAP is very concerned with making sure that is does three things with its acquisitions: avoid a massive, cultural upheaval that comes with big bang acquisitions, make sure that they give at least the perception that they are bringing new technology and new ideas to the market, and be sure that the acquisition makes sense not just with respect to NetWeaver, but with respect to key initiatives like governance, risk, and compliance, and Duet.
In this regard, OutlookSoft is a three-fer. It’s a relatively small company, couple hundred employees, 700 customers (not too shabby, but a far cry from Hyperion’s 15,000 customers), with some great technology. Microsoft Office is the basis for its user interface, which ties in closely to SAP’s Duet strategy. And the CPM focus of OutlookSoft promises to tie in closely with SAP’s GRC initiative, which is making impressive inroads into both the installed base and, even more importantly, with non-SAP customers as well. Which furthers the synergy that OutlookSoft brings to the table: of its 700 existing customers, 75% are non-SAP customers, which was another part of the story that appealed directly to SAP.
What will this do for SAP’s competition with Oracle/Hyperion? One thing that will change is the dialogue around CPM. SAP now has three key products to fill out its CPM strategy: strategy management is covered via the Pilot acquisition, profitability management is covered via a reseller agreement with Acorn. And now planning and consolidation have been covered by OutlookSoft. SAP will have its own integration challenges, though I believe they will be much simpler to surmount than Oracle’s integration requirements vis-à-vis Hyperion.
What I think gives SAP some advantage is the integration with GRC and Duet, which are generally considered leading edge initiatives. Particularly GRC: this is one three-letter-acronym that Oracle has yet to challenge effectively with its own offering (they already do Office integration, though their marketing hasn’t really capitalized on this Duet-like functionality.) Tying corporate performance management to GRC is going to make for a strong case inside the office of the CFO, and has a good chance of putting Oracle on the defensive, something it was hoping was not going to be the case once Hyperion was in its portfolio.
So, the battle is re-engaged, this time in the office of the CFO. It’s going to be an interesting fight, and one that will have important upsell/cross-sell implications for both companies. Watching where these two rivals go won’t just make for a good spectator sport: the future of business intelligence starts here.