I promise no girlie pictures, and definitely no weeping judges, but if you want to know why I think Oracle is now the market leader in sensational, sound-bite news -- big and sexy and easy to put on page one -- please read on.
This is of course about the Hyperion deal, which to be frank could be a pretty good deal for Oracle. But that's not really why it's gotten so much press lately -- from the beleaguered main-stream-media (my daily New York Times covered it, though in the usual "we don't really understand the market dynamics" detail you can expect from much of their technology coverage) -- to the web and blogosphere ad infinitum.
After watching from the sidelines how this deal has been covered, and recovered, it's clear to me that M&A deals like Oracle's $3.3 billion bid for Hyperion get lots of press and lots of play precisely because of what I am now christening the "Anne Nicole Effect": if it's sexy and sensational, it moves. This has been the problem in the MSM for awhile, but it's mostly been discussed in terms of politics, economics, social policy and the like. Well, "Oracle buys Hyperion" proves the problem lives and breathes in our little corner of the tech industry as well. And much to the detriment of all.
Unfortunately, when it comes to the news that matters in our industry, the Anne Nicole Effect is in full force. Neither the New York Times (nor its competitors) has managed to write an in-depth look at the issues behind the strategies of Oracle, SAP, and the rest of the enterprise software market. What gets played is stuff like M&A -- big and brash and titillating -- while the the issues that matter, I believe, more to customers -- product strategy, technology strategy, innovation, total cost of ownership -- are hardly ever addressed.
I blame a fair amount of this on the Wall Street analysts and their priorities, which are too much about quarterly earnings and market cap and not enough about long term value to customers. Wall Street understands M&A very well, and is able to analyze it and pontificate on it and report on it and generally make a big splash about it. But complex product strategies and long-term vision is a little too complex and long-term for them.
There are some notable exceptions -- Kash Rangan and Charlie di Bona are my two favorite Wall Street guys -- but too much of the analysis about the software market is about the Anne Nicole Effect, and frankly, I'm getting a little tired of it.
So, what's the non-Anne Nicole version of the Oracle-Hyperion hype? Here goes in a couple of short sentences: Oracle now gets to sell high-end financial analytics to the CFO, after first trying using what it bought from a company called IRI (kudos to my friend Bruce Richardson at AMR for jogging my memory) and its own home-grown Daily Business Intelligence product. (There's been other attempts as well: PeopleSoft had something called Enterprise Performance Management that Oracle inherited, as well as lots of supposed high-end analytics it got from its Siebel acquisition.) This sale to the CFO lets Oracle talk to CFOs who use SAP as their back-office, which could lead to a strategic conversation about some other product sales, but may not amount to much, insofar as Oracle will never package anything it sells cheaply enough to justify a rip-and-replace of SAP's or any other vendor's back-office software. Not to a CFO worthy of his or her title. Meanwhile, Oracle has another great revenue stream that brings with it a massive assimilation job and another product to place in it's increasingly broad and somewhat confusing product and technology portfolio.
That's it. No surround SAP, no market dominance. Some new sales, but accretive revenues? Hard to tell, and always harder the more Oracle -- and lots of others -- make it hard to understand the true nature of their financials. Some of those more qualified than me to analyze the revenues behind this and other Oracle deals aren't too sure it will be accretive (see Charlie's note on the Oracle-Hyperion deal.)
Sorry that when you look at "Oracle buys Hyperion" without the Anne Nicole Effect, it's a little humdrum. The drama of an M&A is not to be denied, but it should be the back story, not the headline. The headline in this case should be more about whether Oracle can succeed, finally, in reaching the CFO's office with a strategic product that is the latest in a $22 billion-long list of acquistions. I think the answer is yes, but whether that gives it the strategic position against SAP that it wants remains to be seen. Sure, Oracle is out-buying its rival, and sure, the big deals are what's easy to write about. But isn't there something else going on that should take precedent? Or should we all be furtively looking for Anne Nichol on the business page too, to go with all the sensationalism that obfuscates the real news on page one every day?