On July 6th, Business Objects announced that its preliminary results for the second quarter ended June 30, 2006, fell below expectations. Ventana Research believes these lower-than-expected results are a sign of increasing commoditization of query and reporting functionality, which is being driven by pricing pressure from Microsoft and embedded reporting and open source business intelligence (BI) vendors. In fact, our research on open source BI showed higher-than-expected rates of adoption by companies, as well as their intentions to significantly increase the size of deployments in the next 12 months. Business Objects' acquisitions of niche software providers SRC (financial planning and performance management) and Firstlogic (data quality), and CEO John Schwarz's comment that the sales teams must transition to selling a significantly broader product set, indicate that the company is aware of the commoditization and its need to expand beyond query and reporting. Ventana Research recommends that organizations take a broader view than query and reporting when looking to standardize on a BI vendor, and that they factor Business Objects' expanded product capabilities into their evaluation criteria.
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2006 Ventana Research
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