At its annual user conference in Florida last week, US developerre giants in the financial analytical applications market. Comshare unveiled plans to move downmarket by offering mid-range UK clients a budgeting application that can run in tandem with Oracle databases.
Comshare CEO Dennis Ganster told Accountancy Age that the mid-range sector in the UK was one of the company’s main targets for growth, a move that would see Comshare diversifying away from its traditional high-end client base. Comshare made 65% of its overall sales outside the US, said Ganster, and the UK was one of the main markets in Europe.
‘The mid-range market is still very large and it’s not dominated by anyone,’ he added.
Two years ago, before Ganster became CEO, Comshare’s UK presence was seriously weakened after its system for logging software sales came under an audit investigation in the US. ‘It distracted us from everything. Our market capital fell by half and we had no sales people in the UK,’ explained Ganster.
The product that will carry forward Comshare’s new strategy is the budgeting application BudgetPlus. The next version will be able to run both on Oracle’s relational database as well as on Hyperion Solution’s Essbase multidimensional engine, which extracts and computes underlying data relationships from financial systems.
BudgetPlus includes a Guided Analysis feature that warns the finance director, by email or with visual cues, that a division or subsidiary has gone over a pre-determined budget limit. The FD can then drill down to the budget in question and attach it to an email message.
The market for analytical financial applications is going through a period of turmoil, best exemplified by July’s merger between Hyperion, the acknowledged market leader in budgeting and planning applications, and Arbor Software, the original developer of the Essbase on-line analytical processing database. The merger gives Hyperion Solutions a capitalisation of more than $1bn and over 4,000 clients worldwide – including NatWest and IT giant Bay Networks.
Hyperion cannot be ignored, which was confirmed by Comshare’s announcement that it was extending its licensing agreement to resell Essbase and Hyperion Integration Server.
Ganster said he hoped that the deal would end years of ‘bad blood’ between the two companies, stemming from a dispute over royalty payments that was settled out of court last December.
‘This mutual legal dispute had been dragging us down and affecting our customers,’ he said. Comshare needs all the friends it can get at this point, as it is beginning to feel a squeeze from two directions.
The latest research on the business intelligence market by analysts at Gartner Group predicts that larger vendors such as Oracle and Microsoft are planning to offer business intelligence tools, which will cut profit margins among low-end niche players such as Platinum Technology. ‘Vendors will not invest in best of breed and there will be far less choice in business intelligence as users can download OLAP for free,’ said Howard Dresner, author of the Gartner report.
At the same time, Dresner predicted, the trend towards applications tailored for specific industries and vertical markets will encourage enterprise resource planning vendors like SAP to build business intelligence tools into their product suites.
Ganster accepted the likelihood of SAP joining the business intelligence market, but denied that users would ditch specialist budgeting modules in favour of integrated enterprise-wide software.
‘SAP is a powerful company but it has a monolithic structure. Our products integrate with its databases and we have the best of breed for budgeting,’ said Ganster. ‘I don’t believe best of breed is on the way out. People need more flexible systems that integrate with their businesses, and not the other way round,’ he said.
The next convulsion in the analytical applications market will be the release of Microsoft’s own OLAP database, codenamed Plato, later this year. When Bill Gates’ company starts bundling Plato with its SQL Server version 7, it will effectively be giving away the OLAP engine for free.
Ganster admitted that the prospect of Plato was the trigger for Comshare’s two-year effort to transform itself from a tools provider to an applications provider. Comshare’s CEO vowed that its business applications would integrate with Plato, while Hyperion, too, is likely to adapt Essbase to support the future Microsoft database.
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