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Oracle, the Business Intelligence Superpower… Or Not?

Some industry watchers question Oracle’s commitment to BI superpowerdom.

• By Stephen Swoyer
• April 12, 2006

To hear Oracle Corp. tell it, the struggle for business intelligence (BI) market dominance is all but over. Last month, Oracle outlined an ambitious BI strategy centering on its new Oracle Business Intelligence Suite and drawing in part on its expertise in the database and enterprise applications spaces. The upshot, officials say, is that Oracle’s experience in these segments—along with its OLAP, ETL, and Siebel analytics assets—gives it a leg up over BI pure-plays.

Financial industry analysts seem to think as much. They see the Oracle Business Intelligence Suite as the company’s declaration of arrival as a BI power. “[W]e view [Oracle’s] BI products as a logical extension of its flagship database products … [but] we also believe that many enterprises could continue to choose best-of-breed BI solutions for the next few years, or at least until [Oracle] works through the Fusion integration project,” writes Michael Nemeroff, senior vice-president of enterprise software with Wedbush Morgan Securities. “[Oracle’s] declaration of arrival in BI today could be a big first step in the commoditization of that market, particularly at the enterprise level, which could be detrimental to all of the pure-play BI vendors to some degree now that [Oracle] has fully engaged.”

Others are less sanguine, however. TDWI research and services director Wayne Eckerson, says Oracle’s track record with respect to integrating its past BI-related acquisitions hasn’t exactly been spectacular. He questions whether Oracle will be able to successfully capitalize on Siebel’s analytics capabilities, and says that—like the Express OLAP technology it acquired a decade ago—Siebel might simply languish.

Mark Madsen, a decision support manager with online retailer Harry & David and a member of TDWI’s extended research collaborative, agrees.

“[Oracle’s] track record on the apps side of the business with reporting and analysis has been relatively poor. Siebel could change that, but I'm not so sure,” he points out. “I don't know how the two company cultures compare. Oracle's internal development model doesn't support customer-focused efforts very well—… [at least] non-technical customers.”

Cindi Howson, a principal with BIScorecard.com and a TDWI research collaborator, makes the point even more sharply. When Oracle purchased Express (then IRI Express) in 1996, she says, she was at a Fortune 500 company whose database standard was Oracle. “We were initially thrilled with the acquisition and optimistic that it would allow us to have a standard OLAP and Relational DB. It never happened. It seems to me that the acquisition hurt Express more than it helped the product,” she comments. The Express technology didn’t go away, Howson concedes, but the integrated OLAP facility Oracle now touts hasn’t had nearly the same market impact as the former Express OLAP product. “10 years later [Oracle] seems to have better leveraged that technology in ‘Oracle OLAP,’ but the market changed in those 10 years.” She also questions Oracle’s BI strategy, which she says has mostly unfolded in fits and starts, noting that, “18 months ago … Oracle unbundled its BI products from the [Oracle Application Server], and listed the BI suite as a separate line item. They seemed to push [that] for a couple months, and then all went quiet again.” In spite of last month’s bluster, Howson remains ambivalent about Oracle’s BI play: “I have seen some improvement in their marketing efforts, but relative to pure-play vendors and to Microsoft, it's marginal at best. For Oracle, the money is not in BI. So frankly, they don't seem to treat it as important from a resources point of view or product capability.”

Oracle might be setting itself up for a fall, too. Take the company’s decision to abandon its own BI tools strategy by pricing the Siebel Analytics technologies at a premium. TDWI’s Eckerson questions the sagacity of this move. “I wonder if this is a smart thing given that other ERP and database vendors almost give away the tools,” he comments, wondering what Oracle will do “if sales don't pan out as expected.”

On the other hand, there’s a lot to be said for Oracle’s application-centered BI vision. “[T]he BI market focus on ‘operational BI’ plays into scheduled reports and reports tied in to specific processes, an area that ought to be in the ERP vendors' arena. Maybe we'll see a resurgence [of] BI demand inside the ERP environments as opposed to separately,” suggests Madsen. “I know I've been asked about how we could call Business Objects reports up within the OLTP apps, and off the OLTP system [because] … the tools offered by ERP vendors for reporting inside their environments aren't so hot.”

More to the point, Madsen argues, BI is becoming an increasingly process-centric proposition. Oracle may or may not be the vendor best positioned to deliver on this vision—but, at the very least, it can claim to have a credible Rx for BI and business process fusion.

“BI integrated into processes is the model for future app development. The most successful BI work I've done is tying the analysis and exception reporting to the work processes, and making [it] easy to access and pass results [or] decisions through to the OLTP apps,” he concludes. “Even today this is a problem for a lot of retailers, who ought to have adopted this kind of model years ago.”