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HyperRoll, Hyperion Clash—OLAP Wars Revisited

In the age of SCO, patent suits are fraught with peril—especially for end users, who can find themselves simmering in the legal hot seat

• By Stephen Swoyer
• January 26, 2005

When OLAP-performance specialist HyperRoll Inc. last week filed a patent infringement suit against Hyperion Solutions Corp., developer of the popular Essbase OLAP server, many observers felt a twinge of late 1990’s nostalgia. Welcome to the OLAP wars revisited—albeit in a somewhat different venue.

The sleepy OLAP market was once a fiercely contested space, with Hyperion (then called Arbor), Oracle, and others vying for benchmark supremacy. Things have cooled down considerably since the late 1990’s, of course. For example, the organization nominally responsible for overseeing the once-popular APB-1 OLAP benchmark, the OLAP Performance Council, has been defunct for several years.

Lately, however, Hyperion, HyperRoll, and Oracle have combined to keep the OLAP market interesting. Oracle kicked things off in mid-2003 by reviving the mothballed APB-1 benchmark to demonstrate the superiority of its Oracle 9i database over Hyperion’s Essbase—in this case, over a version of Essbase that was four years old. Hyperion struck back in December 2003, smashing Oracle’s benchmark result, and just last month posted another “record” OLAP benchmark test.

At the same time, HyperRoll has carved out a niche for itself as a provider of high-performance OLAP software for Essbase and Oracle’s Express OLAP platform. The company has traditionally declined to disclose how its technology works, but it’s believed to address the problem of storing sparse dimensions in OLAP cubes. Mike Schiff, a senior analyst with consultancy Current Analysis, explains it using an example from the retail space: “Not every store sells every product in every color everyday. But in an OLAP cube, you have to think about that, which requires extra time and extra processing power."

Enter Essbase 7X

For a while now, HyperRoll has been the most prominent game in town when it comes to super-charging OLAP performance. But last summer, Hyperion announced its long-awaited Essbase Aggregate Storage Option, which it delivered with Essbase 7.1, and then in September formally rechristened Essbase 7.1 as Essbase 7X. The business intelligence giant now delivers the Aggregate Storage Option free with Essbase 7X.

At the time of the Essbase 7X rollout, company officials disclosed that the new feature helps ratchet up OLAP performance by more effectively dealing with sparse data sets. “What we’ve done is we had an existing storage layer that was very optimized for storing dense data sets for financial applications, and we called that the block storage layer. What we’ve done with Essbase 7X is add another storage layer that fits in parallel with the dense storage layer and that’s highly optimized for sparse data sets, so we also provide the opportunity to use both of those together,” explained Srikant Gokulnatha, director of product strategy for Hyperion, in a September 2004 interview.

It’s the Essbase Aggregate Storage Option that’s at issue in HyperRoll’s lawsuit, which was actually filed by its parent company, HyperRoll Israel. HyperRoll claims that Hyperion’s OLAP-performance option violates two of its patents covering data aggregation. In addition, the company charges Hyperion with violating the Lanham Act (or Trademark Act) because of claims Hyperion made while promoting Essbase 7X. The company has asked the court for an injunction ordering Hyperion to recall all copies of Essbase 7.1 and 7X, as well as to cease selling new copies of that product.

Don’t dismiss this as a frivolous patent suit, says HyperRoll CEO Michael Bealmear. “There are no such things as frivolous patent suits. Patent matters are taken quite seriously. They’re always federal matters,” he says. “We did a lot of thoughtful analysis and consideration before taking this step. We felt some months ago that we were on very solid ground. We approached Hyperion to have a discussion to try to reach a business-like solution to what we felt were our claims and our rights, and those discussions took some months toward the end of last year, only to be rebuffed at the very end.”

In its suit, HyperRoll claims that Hyperion signed a non-disclosure agreement that gave it access to HyperRoll’s OLAP enhancing technology. Bob Schettino, vice-president of corporate communications for Hyperion, declined to confirm or deny this account, although he did acknowledge that HyperRoll’s action wasn’t completely unexpected.

“They threatened to sue us late last year, and we filed a declaratory judgment option in the federal district court in northern California on November 30th of last year. [T]he purpose was to establish that we have not infringed on any of their patents,” he confirms. How does Hyperion respond to HyperRoll’s claims? “We just feel that their claims are completely without merit. We have a long-term reputation for innovation, and we hold more than half a dozen patents related to key intellectual property in this area.”

Outside of a boilerplate response, Schettino and other Hyperion officials are tight-lipped about the case, which isn’t surprising: IBM officials said little publicly after The SCO Group announced its $1 billion lawsuit against Big Blue.

Users at Risk?

In the age of SCO, intellectual property suits are fraught with peril—especially for end users. SCO, for example, has targeted enterprise users of Linux, arguing that such use violates its Unix System V patents. In turn, the embattled company has introduced a Linux intellectual-property license that it says brings enterprise users into “compliance.” Last year, SCO even filed suit against two prominent enterprise users of Linux, Daimler-Chrysler AG and Autozone Inc.

Nevertheless, HyperRoll’s Bealmear says his company doesn’t intend to target end users specifically. “We’re just targeting Hyperion. We’re not looking at the users,” he says. “It’s not at all clear to us whether Hyperion would indemnify their customers from infringement, or what have you. But it’s clearly our intent that that product be taken off the market, and those copies [be] returned.”

Unlike SCO, Bealmear says, HyperRoll has a viable business model, which includes its OLAP-specific offerings and solutions for relational databases. “I think SCO has decided that their core business is patent infringement, and that’s going to be their primary revenue stream going forward. That clearly is not our strategy or thinking here,” he says. “We believe this will put pressure on Hyperion to come back to the negotiating table. If they don’t, we’ll use that pressure to accelerate this and get this in front of a jury.”

Since Essbase 7X became generally available last September, Bealmear admits, HyperRoll’s Essbase-specific business has slackened—although he declines to say by how much. In November, HyperRoll unveiled a promotional campaign—backed by a $25,000 OLAP performance challenge—to help increase its brand recognition and identify potential prospects. More recently, notes Current Analysis’ Schiff, the company’s vice-president of worldwide sales, Dave Armstrong, relocated to Actuate.