News

Anatomy of the Deal

Microsoft-Hyperion Solutions Corp., April 25, 2006

The Partner
Hyperion Solutions Corp. is a leader in what it calls business performance management software, a category it claims to have pioneered. (Analyst firm Gartner Inc. calls the category corporate performance management.) Hyperion's applications combine financial management capabilities with business intelligence (BI) functionality.

Based in Santa Clara, Calif., Hyperion is a Microsoft Global ISV partner that participates in beta programs. The company has also long competed with Microsoft in the online analytical processing (OLAP) space and is actually a competitor in the BI space as well. Hyperion generated revenues of $703 million for its fiscal year ending June 30, 2005.

The Deal
BI applications cut through SQL code, giving non-technical users easy access to real-time reports on key metrics within a company or industry without requiring IT people to intervene in the report-creation process. This link-up will integrate SQL Server 2005 technologies with Hyperion System 9 BI+, the BI component of Hyperion's system. It gives Hyperion customers access to Microsoft's SQL Database Management System (DBMS) through a Hyperion front-end interface and also lets users access Hyperion's analytics functions through a Microsoft front-end.

Customers will be able to use SQL Server Reporting Services, Microsoft's front-end reporting engine, to directly access data stored in Hyperion System 9 BI+ Essbase Analytics. It'll work the other way around, too: Users will also be able to access SQL Server Analysis Services data using Hyperion System 9 BI+ and display SQL reports in the Hyperion System 9 Workspace front-end interface. System 9 will use SQL Server Integration Services to move SQL data from a Microsoft environment to a Hyperion environment.

The Market
BI is a highly competitive sector that includes stars such as Hyperion, Ottawa-based Cognos Inc. and Business Objects SA, based in Levallois-Perret, France and San Jose, Calif. Gartner predicts that BI will be a $3 billion market by 2009. Microsoft itself is also a significant BI player and made further inroads into the space in April, when it bought ProClarity Corp., a Boise, Idaho-based Microsoft Gold Certified Partner and maker of BI tools.

How Partners Will Benefit
This deal will create a powerful combination for partners, who will be able to sell Hyperion's well-regarded BI application tightly integrated with increasingly pervasive SQL technologies. Customers have demanded a combination of SQL and Hyperion, says Tobin Gilman, Hyperion's senior director of product marketing.

James Kobielus, principal analyst for data management at Washington, D.C.-based Current Analysis Inc., agrees. "The fact that Hyperion has a strong partnership with Microsoft means that Hyperion is aware that customers are asking for tighter integration with SQL server," he says.

How Users Will Benefit
The pairing is especially beneficial for mutual customers of the two companies, who will now be able to go beyond simply using System 9 BI+ to perform SQL queries and reports.

How Hyperion Will Benefit
The partnership gives Hyperion critical access to the SQL Server DBMS. Kobelius notes that Hyperion doesn't have a DBMS of its own. "Hyperion is regarded as being a very strong best-of-breed player," he says.

"It's just a matter of Hyperion, a superior BI suite, wanting to hook up with one of the leading platform players, which has a DBMS at its core."

How Microsoft Will Benefit
Microsoft, despite having a strong BI offering, wants to demonstrate that it's serious about moving into the BI space, Kobielus says. A partnership with Hyperion demonstrates just that and also signals that the company believes that BI is an important technology. Once Redmond has customers' attention, Kobielus says, it will be able to sell more of its own BI applications and push strategic partners' wares less often.

"[Microsoft] will de-emphasize strategic partnerships going forward in favor of its own tools," he says.

About the Author

Lee Pender is the executive features editor of Redmond magazine. You can reach him at lpender@redmondmag.com or follow him on Twitter.

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