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1/17/2008
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SAP Completes Business Objects Buy, Details 'Business Optimization' Vision

Nine "joint product packages" present roadmap toward business intelligence and information management product offerings.

SAP yesterday announced the completion of its acquisition of Business Objects. In what it called the first indication of "the successful pace of integration," it also announced nine "joint product packages" that will be available this month while also presenting a portfolio roadmap.

In a video press conference held at SAP's offices in Palo Alto, SAP CEO Henning Kagermann said the combined business intelligence and information management forces of SAP and Business Objects immediately vault the company to number-one position in a $15 billion industry with $2.6 billion in revenue and a 17-percent market share. With Business Objects operating "mostly independently," Kagermann said SAP would be differentiated in being "the only one on the market that can offer what we call business performance optimization in a closed loop."

Elaborating, Kagermann said business optimization will enable customers to connect strategy to execution. "That strategy can be monitored and understood in the context of real-time data, with the ability to implement changes in the underlying processes instantly as we understand the performance of the organization."

The Business Optimization vision sees business intelligence integrated with SAP's growing model-driven business process management (BPM) portfolio, yet core elements are still months away from delivery.

"Despite all of the rearchitecting SAP has done for SOA, it still doesn't have explicit process management," says Gartner analyst Janelle Hill. "The company is beginning to preview and demo a new product called Galaxy, which is the company's new explicit process management technology, but it won't be delivered until late 2008."

As for the nine new joint product packages, they will all be sold by both sales forces as well as a 700-member "Overlay" salesforce focused on platform-independent Business Optimization solutions. SAP and Business Objects executives claim to have discovered few overlaps in the two portfolios, and where overlaps do exist, roadmaps are in place for integration and rationalization.

The packages are grouped into three areas: performance optimization applications, business intelligence platform capabilities and packages specifically for the small and midsize market. The performance optimization applications include:

Financial Performance Management (FPM) package. Aimed as CFOs tackling financial performance and operational efficiency, this portfolio has the most overlap, including organically developed and acquired assets from both companies, including IP from Outlooksoft (and SAP acquisition) and Cartesis (Business Object's 2007 acquisition).

Governance, Risk, and Compliance package. These tools and solutions for mitigating risks and confirming compliance with corporate governance policies are almost entirely from SAP.

"Financial Performance Management is the only area in which there might be any question in terms of which product goes where," said Marge Breya, executive vice-president, marketing and strategy at Business Objects. "Depending on whether it's a small or medium enterprise and which products they've invested in, we'll have a path forward so no customers are left behind. In selling new solutions, we're also being very clear about the preferred path forward."

The business intelligence platforms stem largely, though not entirely, from the Business Objects portfolio, and they include:

Visualization and Reporting package. Formatted reporting technologies from the Business Objects Crystal and Xcelsius Enterprise portfolios.

Enterprise Query, Reporting and Analysis package. An extension of the Visualization and Reporting package. Adds query and advanced analytics, plus dashboarding and visualization, OLAP connectivity, guided search and mobile connectivity – primarly from Business Objects, though technologies from SAP will join this portfolio.

Data Integration and Data Quality Management package. Data integration, federation and data quality technologies primarily from Business Objects.

Master Data Services package. Master data management and data connectivity technologies from SAP.

Small- and midsized-business enterprise packages will include:

SAP Business All-in-One with BusinessObjects Edge Standard package. Combines SAP and Business Objects SME offerings, though as yet no integrations or special pricing/packaging combinations have been established.

Crystal Reports Server package. Current Business Objects technology to be sold through both channels.

BusinessObjects Edge Series package. Current Business Objects offerings (said to already include integrations for SAP Solutions) to be sold through both channels.

SAP stressed that technologies including its Business Warehouse, Business Information Accelerator, Master Data Management and SAP NetWeaver Business Intelligence would continue to be supported, managed and maintained directly by SAP, rather than by the Business Objects unit.

"There is not disruption in the strategy whatsoever," said Peter Graf, executive vice-president, global large enterprise marketing. "We will continue to push the SAP NetWeaver Business Information Warehouse as part of our Business Suite and NetWeaver assets. That's not at all contradictory to what we do with the Business Objects assets because they are designed to work with everything."

SAP and Business Objects executives also repeatedly stressed an "open" path, answering competitors and critics that have asserted that the merger will lead down an exclusionary path. "We remain committed to the idea of openness and heterogeneity in the platform and the data sources that we support," said Business Objects CEO John Schwarz. "We're equally committed to SAP customers and to non-SAP customers, non-SAP platforms and non-SAP environments. For example, our intention is to have a BI solution on top of Oracle's platform that's better than Oracle's own BI solution."

Competitors continue to emphasise the integration and rationalization challenges that lie ahead for SAP and Business Objects. During this week's Cognos 8.3 launch press conference, for example, Cognos CEO Rob Ashe used the phrase "Waldorf Salad" to describe the combined portfolio, an obvious dig at Walldorf, Germany-based SAP. "If you look at all the different flavors of technology they have just in the area of planning, the customers are going to be confused and they're going to have to rationalize."

Downplaying the significance of those efforts, SAP executives are selling a compelling, though hardly unique, vision of business optimization that extends beyond the domain of business intelligence into model-driven development and process management. The question is whether real accomplishments on this front can arrive soon enough to encourage current customers and would-be customers to overlook any disarray in more established categories of software.

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