SAP to Acquire CPM Provider OutlookSoft

SAP ups the ante in competition with Oracle for CFO's attention.

It was rumored SAP would announce at least one acquisition at its recent Sapphire user conference that carried the theme of the CFOs emerging role.

While the whispers never amounted to anything during the conference, the speculation later became a reality with the acquisition of OutlookSoft Corp.

SAP announced May 8 its intention to acquire OutlookSoft, a privately held company that develops planning, budgeting, forecasting and consolidation software—all functions geared toward the CFO managing complex mergers and acquisitions amid a field of global mandates and regulations.

SAP plans to bridge OutlookSofts performance management software with its Business Intelligence platform and GRC [Governance, Risk and Compliance] suite of applications. To this end, SAPs acquisition of OutlookSoft fills a key gap in SAPs strategy to entice the CFO: Corporate Performance Management, capabilities that enable a CFO to answer fundamental questions about his or her business: How are we doing? Why are we doing it? What should we be doing?

Its an area being developed not only by SAPs biggest competitor, Oracle Corp., but also by pure play BI providers such as Cognos, Clarity Systems and MicroStrategy.

Microsoft also is planning a big splash in the BI market. On May 9, Microsoft is holding its first BI conference where Jeff Raikes, president of the Microsoft Business Division, will outline the companys vision and strategy for delivering pervasive BI and corporate performance management.

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Oracle closed its $3.3 billion acquisition of Hyperion on April 19. The deal brought to the table financial planning and consolidation software along with a multi-source OLAP server. Combined with Oracles existing smattering of business intelligence capabilities, Oracle now has the ability to offer a complete Enterprise Performance Management suite that provides planning, consolidation and operational analytics, BI tools, reporting and data integration.

Given that SAP and Oracle compete head-to-head on just about every level of business application and integration functionality, a CPM acquisition on SAPs part is an appropriate strategic move, according to analysts.

"SAP has addressed a major gap in its business planning performance management offerings with the acquisition of OutlookSoft," said Forrester analyst Paul Hamerman in his blog. "The internally developed SAP offerings known as SEM had seen limited traction among its customer base due to usability and complexity issues. SAP has been vulnerable to competitors (e.g. Hyperion, Cognos) particularly in the planning and budgeting domain."

Hamerman believes SAPs acquisition of OutlookSoft puts the company back in the game with planning and budgeting software that complements its recently acquired strategy management software (through SAPs Pilot Software purchase) as well as its core financial management applications and analytics platform.

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