Informatica Strikes OEM Agreement With SAP AG

SAP has long been accused of being "closed" and "proprietary" with many facets of our technology including our Business Intelligence and Performance Management capabilities. The statement I always used to hear before I joined SAP is that NetWeaver BI was "only good for SAP data". It never quite made sense to me, at least the way it was phrased, because SAP data is no different than non-SAP data. Our software runs on the most common relational database technologies including Oracle, Microsoft, and IBM's offerings, and uses tables, fields, and standard data types just like any other packaged software product. And sure enough, when I got here, it became readily apparent that, as much as we would like customers to be "all SAP", nobody here thinks this is realistic!

Our market research has proven that companies increasingly rely on SAP NetWeaver as the integration platform even across highly heterogeneous environments. For example, today there are already 70% of SAP NetWeaver BI customers integrating between 25% - 40% of non-SAP data, in many cases even up to 70% of the data being sourced outside of SAP systems. That being said, there are a lot of innovations that a company dedicated to data integration with a track record of excellence can really add that augment our core capabilities. Therefore, we are really happy to announce this partnership with Informatica, who has always provided fantastic data integration capabilities and has long been recognized as a market leader in this space. The added capabilities will further the flexibility for data integration while considerably lowering cost of integration, specifically in the case of integration of heterogeneous information infrastructures.

With a combination of our existing BI technology with tens of thousands of installations, new innovations like Business Intelligence Accelerator, and key capabilities being augmented by market-leading partners like Informatica, I am certain we will continue to observe the dramatic uptick in customer deployments that we are seeing today.

You can read the press release below:

Informatica Strikes OEM Agreement With SAP AG
Leading Enterprise Software Vendor Will Embed Cornerstone Informatica Products Into Key Software Offerings


REDWOOD CITY, Calif., July 23, 2007—Informatica Corporation (NASDAQ: INFA), a leading provider of data integration software, today announced that it has entered into an OEM relationship with SAP AG (NYSE:SAP), the world's leading provider of business software.
Under the terms of this OEM agreement, SAP will embed Informatica's market-leading PowerCenter, PowerExchange and Metadata Manager software into SAP® performance management and analytic applications and the SAP NetWeaver® platform for master data management and business intelligence. By incorporating Informatica's products into its applications, SAP will now be able to offer customers the ability to better integrate and track data from non-SAP, third-party and legacy systems.

"With the continually increasing fragmentation of corporate data, there is more need than ever before to integrate, transform and manage corporate information effectively," said Paul Hoffman, executive vice president, Informatica Corp. "Our OEM relationship with SAP will help ensure that customers have access to Informatica's best-in-class software to connect their business data – regardless of the source – into their SAP business applications."

"This agreement with Informatica will enhance and extend SAP's business solutions and allow our customers to access this best-in-class technology to further SAP's goal: driving unparalleled visibility and management across an enterprise," said Nimish Mehta, senior vice president, Enterprise Information Management, SAP. "With this agreement, both our existing and new customers will benefit as Informatica and SAP work closely together to deliver world-class enterprise software to an ever-increasing customer base."

Webcast Alert - Tom Davenport and Nenshad Bardoliwalla on Optimizing Corporate Performance for Competitive Advantage

I just wanted to drop a quick note to let you know that I have the privilege of conducting a webcast with Tom Davenport this week on Wednesday, July 25, 2007 at 1:00 PM EDT and welcome any of you to join. For those of you who have not had the privilege of hearing Tom speak, he holds the President's Chair in Information Technology and Management at Babson College and is responsible for the overall management of the Institute for Process Management. His recent book, Competing on Analytics: The New Science of Winning, is a tour de force on how leading companies have been able to establish a strategic advantage against their competitors by using analytic technologies. Besides being very erudite, Tom is an excellent speaker with great stories and a wittiness that is not necessarily the hallmark of academic scholars. I hope you'll enjoy it!

Webcast Details

Optimizing Corporate Performance for Competitive Advantage
Date: Wednesday July 25, 2007 Add to Outlook
Time: 1:00 PM ET Convert to your timezone
Speakers include:
Nenshad Bardoliwalla, Vice President, Corporate Performance Management Solution Management, SAP
Tom Davenport, Author

As most leading companies seek to drive maximized corporate performance by applying greater analytical rigor to their business processes, performance gaps are being minimized, if not eliminated, allowing companies to fully capitalize on the value of the cross section of their internal and market information. At times, the breakdown of their faulty decisions can be attributed to faulty data and data assumptions, poor communication and collaboration -- therefore, performance gaps are now under siege as leading edge companies adopt broad capabilities for enterprise-level business analytics and intelligence.

Join thought leader and author Tom Davenport and VP of Solution Management for Corporate Performance Management products at SAP, Nenshad Bardoliwalla, for an interactive discussion on best practices and approaches that are driving agility and competitive advantage in organizations today.

In this one-hour event you will hear how to:
• Start an iterative corporate performance management initiative
• Formulate a base line from which to define corporate goals
• Drive adoption of corporate goals throughout the organization
• Ensure plans and budgets are linked to strategic goals
• Provide information to any stakeholder in time and context
• Provide management and statutory reporting

SAP acquires OutlookSoft and launches the Next-Generation of Corporate Performance Management solutions

I've been quiet since we (SAP) acquired Pilot Software, and for good reason. In the three months since we brought Pilot into our fold, we proceeded to announce a global reseller arrangement with Acorn Systems for their profitability management software, and then extended our leadership in offering solutions to the Office of the CFO with our acquisition of OutlookSoft, a market visionary who has been establishing the next-generation of Corporate Performance Management solutions for the last seven years. With Pilot and OutlookSoft in our portfolio, and with our strategic reseller agreement with Acorn, there is no question that SAP has completely leapfrogged the market in delivering the next-generation of Corporate Performance Management solutions. Moreover, when taken together with our market-leading and defining ERP solution, and the visionary Governance, Risk, and Compliance unit we established last year with the acquisition of Virsa, it becomes apparent how we are now the only vendor to offer a Unified Financial Management solution. At SAPPHIRE 2007, our CEO, Henning Kagermann spelled out this vision very clearly, as shown in this diagram below:



In future posts, I will hopefully have the chance to articulate the overarching principles of our Office the CFO strategy and how our Corporate Performance Management strategy supports this, but those of you who are interested, you can watch the presentation given by Adam Thier and myself at SAPPHIRE Vienna 2007, which spells it out in great detail. As I had the chance to lead our due diligence of OutlookSoft, I want to take this opportunity to point out what we saw in OutlookSoft that made it so compelling for SAP and our customers.


The first aspect of OutlookSoft that we found compelling was unification. The entire performance management experience is driven by the same metaphors and metadata, regardless of whether or not one is conducting planning, budgeting, and forecasting, legal or management consolidation, or building financial reports. For ALL of these processes, the dimensional model is the SAME. The business rules are the SAME. The user-experience is the SAME. This dramatically reduces the TCO of the solution and makes it much simpler to design performance management processes that span the entire value chain of an organization, and not make customers pay a penalty if they want to expand beyond planning to management consolidation to financial reporting.

This is in stark contrast to the offerings of our competitors, like Oracle's Hyperion System 9, for example, which is a patchwork of dozens of acquisitions that are almost completely unintegrated across the same set of processes. The only thing integrated about System 9 is the fact that you you can get all of this disparate technology on the same DVD. Ok, that's not entirely true, it does share "common security" and a "common installer", which a few customers probably find compelling. When you use Hyperion Planning, it relies on the ancient and soon-to-be legacy technology of Essbase, a proprietary, decade-old multidimensional engine that has severe scalability issues due to its inability to handle sparse data and time-consuming cube recalculation times. Do you want to write a formatted financial report off of your Hyperion Planning data? You need Hyperion Financial Reporting. Do you want to slice and dice your Hyperion Planning data? You need Hyperion Web Analysis. Contrast this with OutlookSoft, where the EXACT SAME APPLICATION is used for financial reporting, slice-and-dice, and planning, with none of the hassles of having multiple reporting applications and legacy multidimensional databases to maintain.

And don't even THINK you can get any economies of scale by introducing consolidation capabilities into your existing Hyperion Planning landscape. For that, Hyperion licenses a SEPARATE application, Hyperion Financial Management, which is COMPLETELY DIFFERENT from Hyperion Planning. Same database? Nope. Same metadata? Nope. Same dimensional structure? Nope. Sames business rules definition? Nope. Want to bring together your actual and plan data? You do the same thing with Hyperion's own applications as you would do to port data between two applications from completely separate vendors: you move the data over using a flat file! Contrast this with OutlookSoft, where the EXACT SAME APPLICATION is used for consolidation, with the same database, same metadata, same dimensional structure, same business rules, etc. with none of the hassles of having multiple reporting applications and legacy multidimensional databases to maintain.

Now, to be fair, Oracle has proven itself astute in reconciling its large technology assets before, and that is likely to be true here as well. So Hyperion's mediocre BI tools, like Web Analysis, Financial Reporting, Interactive Reporting, and Production Reporting, that are crucial to extracting any value out of their disparate applications are almost certainly not going to live very long. With the Siebel acquisition, Oracle declared that Siebel Analytics would become the de facto BI offering (although I still don't think the Discoverer and Daily Business Intelligence teams have seen the memo yet), and this offering was re-christened Oracle BI EE 10g. And what does that mean for Hyperion's customers? It means that Hyperion customers can look forward to having to replace all of the Business Intelligence investments they made with the Hyperion tools and migrate to the Oracle BI EE 10g tools, and having yet another set of metadata, business logic, and architectural headaches to worry about. But that's not the worst of it. It has never been a secret that Oracle's database team has held the development power within the company, and they have invested a lot of energy into building up the Analytic Workspaces for multidimensional functionality within the most recent versions of the database. Given the fact that the database team rules the roost and is one of the only area of the company besides the M&A group that is still trying to innovate after Oracle's decision to turn from software company into technology holding company, it would be very surprising to see Essbase live more than a year or two, which means that Hyperion customers can also look forward to a forced migration to Oracle's Analytic Workspaces technology. After all, Oracle may provide"Applications Unlimited", but they never said anything about "Middleware Unlimited", so there is no guarantee about the life of acquired middleware products, and inexplicably, Hyperion is part of the middleware group at Oracle. I don't know about you, but any company that thinks the same group that develops the java application server should also be responsible for statutory consolidation capabilities for IFRS probably doesn't understand CPM that well. But I digress. This blog is about OutlookSoft and SAP, and why OutlookSoft's unification is so valuable for customers. That should be readily apparent now.

Another aspect of OutlookSoft that customers find incredibly compelling is its very strong usability. In looking at every CPM vendors offerings, we found that OutlookSoft far and away had the most usable applications, with powerful, patented functionality that could really extract the full value of Microsoft Office, well beyond what anyone else had been able to accomplish in the industry. With OutlookSoft, end-users can leverage their entire skill set with Microsoft Excel without having to suffer from the constraints of other vendors add-ins. ALL formatting, formula operations, and commentary, etc. capabilities can be used in Excel, while still maintaining the value proposition of a centralized performance management environment on a common database. Every other tool in the market is either "Excel-like" or "Excel-lite", placing unnecessary constraints on the users that frustrate them to no end. What's the point of giving end-users the appearance of Excel when they can't use the full power of the solution?

At this point, Oracle probably has 10-15 Excel front-end clients, many of which they acquired from Hyperion. Essbase had an Excel-client (historically one of the best in the industry), HFM had one, Hyperion Planning had one, and other applications had them as well. For many years, these multiple Excel clients didn't even work with each other. The idea then to unify all of these Excel-clients manifested itself with SmartView, which came out a couple of years ago. SmartView was a great idea, since there would finally be one Excel client for all Hyperion applications. It only had one problem: it provided the lowest common denominator of functionality across all the individual Excel plug-ins. Much of the power of the Essbase Excel add-in could not be achieved, so customers were left in a lurch. Of course, now things should be much easier for Oracle customers, since Oracle BI EE 10g, which will become the BI tool of choice for Hyperion applications, also has its own lousy Excel add-in. In stark contrast, as mentioned before, OutlookSoft has one Excel add-in, and it's way better than anything else out there.

A third aspect of OutlookSoft that is incredibly compelling is the notion of business process flows. While the dinosaur, monolithic architectures of previous generations of performance management solutions have enforced process siloes, what companies really want is the ability to manage the entire performance management cycle holistically in a process framework. OutlookSoft allows you to do exactly that. With prepackaged Business Process Flows for monthly budgeting, management consolidation, legal consolidation, CapEx planning, Workforce Planning, etc., the entire set of roles, dimensional entities, input schedules, etc. are all packaged together and can be orchestrated across the entire organization. Financial analysts can see exactly where the organization is in terms of who is in what step of a process, and end-users know exactly where they came from, where they are, and where they have to go next in the performance management process. This is a huge differentiator and something that none of our competitors do. Hyperion has been talking about adding comprehensive, suite-wide workflow capabilities to its disjointed collection of applications for years, but so far, it's still talk.



Finally, because OutlookSoft did not have to invest in stapling a large portfolio of mediocre, acquired products together, they were able to invest heavily in modern technology like Service Oriented Architecture to provide a high degree of flexibility and interoperability with other applications. For example, in the Business Process Flows capability of OutlookSoft, ANY web service that has a standard interface exposed by a WSDL can be consumed so that end-users can stitch together composite application processes using standards-based technology. Contrast this with the architectures of our competitors, who still use CORBA and decade-old MOLAP technologies as their underlying architectures and you can understand very quickly why our technology is vastly superior.

Of course, technology for its own sake has little value when it comes to business applications, and it is clear that OutlookSoft's architecture confers upon customers huge business advantages. With OutlookSoft's SOA approach, business processes can be reconfigured on the fly by taking advantage of the underlying application services available to give customers the agility they need in an environment that changes on a dime. By avoiding a pure reliance on legacy MOLAP technology, OutlookSoft can aggregate information from any level of a dimensional hierarchy, so you can see the impact of changes to your models made deep at the leaf level in the application reflected at a much higher aggregate level without having to go through the expensive and time-consuming process of recalculating cubes.

But OutlookSoft is only the end of the first chapter of our story. As we combine it with the deep profitability modeling capabilities provided by Acorn and the visionary strategy management capabilities of Pilot, and then intertwine it with the Governance, Risk, and Compliance functionality that SAP has pioneered, the end-results far surpass the depth and breadth of both vision and functionality of any other CPM vendors in the space. When combined with SAP's Business Process Platform, defined as the combination of the deep application functionality provided by our market-leading Business Suite and the enterprise class technology backbone of SAP NetWeaver, we will be the only vendor in the industry to offer BOTH the empowerment and flexibility that finance end-users need for performance management along with the enterprise class backbone that IT organizations have come to rely on.

The Next Generation of Corporate Performance Management solutions for the Finance Professional of 2010 is here. Judging from the response of our customers and more interestingly, that of our competitor's customers, it is clear that they recognize the value, innovation, and vision of what SAP is delivering, and this is only the beginning! Please contact me to learn more.

SAP brings strategy to everyone - "Web 2.0" style

A picture says a thousand words, so I thought I would begin my post with one. It's official, SAP acquired Pilot Software last week, and you can read the press release here: SAP Strengthens Leadership in Analytic Applications Market with Acquisition of Pilot Software. Pilot's flagship application, PilotWorks, is highly interactive and has the visually engaging user experience you see above and below:



So what does PilotWorks do? It's an integrated system for delivering the goals, metrics, and initiatives to every person in an organization to help align them to the overall strategy. What we loved about the application as we got to know it better is how incredibly flexible it is. It is completely methodology agnostic. If you want to use the Kaplan and Norton Balanced Scorecard methodology, you can, but any of a number of other performance management methodologies are supported as well.

The view above is a drilldown on a scorecard. Note how refined the performance management concepts are: the use of qualitative AND quantitative metrics, classification of metrics as leading or lagging, are but two examples of a team that really understands performance management and has gleaned this knowledge by listening to how their customers need to use software to meet their business needs.

So why the "Web 2.0" moniker in the title? One of the features that really distinguishes this software from others is its highly collaborative nature. Threaded discussions, annotations, and operational reviews all allow workers to participate in the evolution of their organizations' strategies, not just be a victim to them. This is the secret sauce that turns the strategy that the management team crafts into something that is relevant and interesting for their employees.

While we were enamored with the technology, we were even more impressed with the team. These are a group of top notch industry veterans who really take pride in their work and it shows, and the fact that they are all nice people to work with makes it even better. Pilot's former CEO, Jonathan Becher, has a bookshelf stacked with books on performance management topics, and he has read all of them, but he also has a very pragmatic and approachable take on the topic. His blog, Management By Walking Around, is well worth a read to understand what performance management really could be like in your organization and what benefits you can hope to achieve. Many of the developers have multiple decades of experience on the cutting edge of OLAP technology which has given them the platform to build really powerful analytic applications like PilotWorks.

Overall, we think this acquisition will be the launching pad for our very serious aspirations to become a leader in the performance management space, and the industry analysts, press, and our competitors have most definitely noticed. John Hagerty of AMR, one of the most respected voices in this space, noted about the acquisition that, "the products look very promising and fit well into SAP’s articulated vision"in his article today. Over the next few months, there will be a lot more to say, but 2007 is definitely the year that SAP takes it up a notch in this market.

SAP is the market leader in Analytic Applications!

It is with great delight that I announce what we have known for quite some time internally: SAP is the market leader in Analytic Applications according to IDC. To further extend our leadership, we also announced the GA of our xApp Analytic composites, which allow customers for the first time to realize the promise of combining transactional and analytical information in the context of a business process to facilitate decision-making.

In parallel with this announcement, we also had two announcements on the infrastructure side: on the BI platform side, entitled SAP Reports Significant Market Share Gain in Business Intelligence, which details the great improvements we’ve made on the infrastructure side and our customers’ successes with NetWeaver BI 2004s and NetWeaver Business Intelligence Accelerator, and on the MDM side, entitled SAP Leads Product Information Management Market Worldwide, that articulates SAP’s leadership in the Product Information Management market. From the combination of these announcements, it should be clear that SAP is clearly serious about the Business Intelligence and Performance Management market and have numerous customer successes to prove it.