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.
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.
-sell opportunities for SAP”> OutlookSoft, based in Stamford, Conn., is a relatively small company with 250 employees and about 700 customers (a drop in the bucket compared to Hyperions 15,000 customers)—75 percent of which are non-SAP customers, which presents a good up-sell opportunity for SAP.
Its latest suite, OutlookSoft 5, is based on a SOA (service oriented architecture) platform that will meld nicely with SAPs NetWeaver integration platform, SAP officials said. SAPs NetWeaver Business Intelligence will serve as the BI infrastructure for OutlookSoft 5s applications.
“From the beginning, OutlookSoft has focused on helping business users, the executive team and, most importantly, the CFO,” said Phil Wilmington, president and CFO of OutlookSoft, in a statement. “Our solution unifies organizations, disparate systems and processes through innovative technology and accessibility to information.”
The focus on two key areas for both SAP and Oracle—GRC and the CFO—is putting a stake in the ground through the area of business intelligence, a priority for companies as they begin to look at more ways to leverage business process automation in a SOA environment. Oracle started spotlighting BI about a year ago with the release of its namesake Business Intelligence Enterprise Edition that includes BI tools, applications and a data integrator.
While it also has a BI platform, SAP has taken a radically different approach with its BI Accelerator, an appliance-based product that uses in-memory technology to vastly increase the speed at which queries can be performed. BIA could be a big step for SAP in other areas as well, as the in-memory technology doesnt require an underlying database—a fact that one day could serve to undermine Oracle where it hurts with database sales (this point is way beyond SAPs current plans with OutlookSoft, where the focus is integration with finance and GRC applications).
Joshua Greenbaum, in his Enterprise Anti-Matter blog, pointed out that GRC is an area where SAP outshines Oracle.
“What I think gives SAP some advantage is the integration with GRC and Duet [the dual development program between SAP and Microsoft to expose SAP processes in Office]…Particularly GRC: this is one three-letter-acronym that Oracle has yet to challenge effectively,” wrote Greenbaum. “Tying corporate performance management to GRC is going to make a strong case inside the office of the CFO, and has a good change of putting Oracle on the defensive, something it was hoping was not going to be the case once Hyperion was in its portfolio.”
Duet has been a strong motivator for SAP in its pursuit of Microsoft as an integral partner—yet another distance point from Oracle. Technology Business Research analyst Stuart Williams points out that OutlookSofts SOA-based platform is based on the Microsoft stack: Microsoft Excel, Business Intelligence Platform, SQL Server and SharePoint Server.
“The close integration of SAPs Duet 2.0 with SharePoint, combined with the integration already in place with OutlookSoft, implies a clear direction for SAPs future development for the business user,” writes Williams in a May 9 research note. “TBR believes the acquisition provides SAP customers with an alternative to the Oracle software stack and strengthens future alliances between SAP and Microsoft. OutlookSoft was one of Microsofts top five global partners and a finalist for the Microsoft Global ISV Partner of the Year Award.”
That said, the parrying between SAP and Oracle continues; Hyperions customer base consists mainly of SAP users.
SAP expects the acquisition of OutlookSoft to close in June, pending standard regulatory approvals.