Hyperion Buys Brio, Glimpse of BI's Future Provided

by Dan Burger

The shake-out from the announced merger of business intelligence (BI) software companies Hyperion and Brio will get some notice at midrange shops, where Hyperion software is currently installed and where BI projects are being planned by companies that fit mostly into the Fortune 1,000 category. Although the addition of Brio technology will have little initial effect on most small and midsized Windows and Linux shops, the long-term effects could be dramatic. It's easy to imagine this merger being an indicator of future BI directions that all platforms might take.

Strictly from a product point of view, the July 23 merger marries Brio's integrated query, analysis, and reporting solution with Hyperion's BI technologies that integrate data from multiple operating systems, multiple relational databases, and diverse ERP, CRM, and SCM systems. Brio has been a technology partner with Hyperion since 1996.

With the addition of Brio's products, Hyperion officials expect to capture customers earlier in the buying cycle. That means purchases at the departmental level, rather than the enterprise level. Then, as the needs of a company grow from simple reporting against transactional systems to dynamic performance monitoring of key operational measures to key performance indicators (where the iSeries has traditionally played a large role in the advanced analytic process), Hyperion can get in the game early at the data consolidation/decision support stage.

Brio, founded in 1989, has more than 10,000 customers and a reputation for developing excellent products, but has recently been weathering a fiscal storm. At the end of June, it reported a first quarter loss of $2.1 million on sales of $24.8 million. Hyperion also reported financial results June 30. Its fourth quarter registered a year-to-year gain in net income of 47 percent, to $9.2 million, while sales increased by 2 percent, to $138 million. This marked the end of a solid fiscal year as well. Net income was up 127 percent, to $34.1 million, based on a four percent revenue gain to $510.5 million. Officials from both firms peg 12-month revenues for the combined companies at $613 million.

According to IDC, the business intelligence category is currently a $6.1 billion market and is expected to grow to $11 billion annually by 2005.

The combination stock and cash deal between the two companies is valued at $142 million. Each company's board of directors approved the acquisition, but approval from Brio stockholders and government regulators is pending. It is expected to close in the fourth quarter.

In a separate agreement, Hyperion will immediately begin reselling Brio's enterprise reporting, query and analysis, and dashboarding capabilities to Hyperion's 6,000 customers.

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