Software // Information Management
Commentary
10/8/2007
10:57 AM
Cindi Howson
Cindi Howson
Commentary
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Synergies, Overlaps in the SAP-Business Objects Deal

An interesting spin to this acquisition versus others is that Business Objects will remain a separate company under SAP's ownership... which could offer customers and prospects the best of both worlds... So where's the catch?... Customers can expect a number of modules from Business Objects XI to become part of the Netweaver BI product, complementing (rather than replacing) interfaces such as SAP Business Explorer. SAP meanwhile, brings MDM and in-memory capabilities to Business Objects.

It looks like this time the rumor mill got it right as SAP announced its friendly take over of Business Objects, to the tune of 4.8 billion Euros or $6.8 billion. It makes it the priciest BI/Performance Management deals of the year.

Business Objects CEO John Schwarz did say that the rumors were wrong about the company being shopped around and instead SAP had approached Business Objects. The agreement to be acquired does indicate a change of course for Business Objects, which previously stated its intent to remain a pure-play vendor. With the deal valued at more than five times revenue, the price must have been right. Add to that an SAP-Business Objects combination makes a formidable competitor versus Oracle-Hyperion and Microsoft.An interesting spin to this acquisition versus others is that Business Objects will remain a separate company under SAP's ownership. This organizational slant could prove to offer customers and prospects of either company the best of both worlds. It also is a smart move to stave off competitive FUDing (fear, uncertainty, and doubt) that the BI/PM vendor will become proprietary or a bit-player in the larger SAP.

In explaining the motivation for the acquisition, SAP CEO Henning Kagermann cited business intelligence as the top priority for IT spending. The possibility to cross-sell offers growth possibilities to both companies' existing customers, of which only 40 percent are joint customers. Kagermann also cited synergies in the on demand space (with SAP By Design on one hand, and Business Objects Information on Demand on the other), an attractive proposition for mid-market customers and in stark contrast to Oracle, which has chosen not to pursue SaaS.

So where's the catch? The reporting and analysis tools in SAP Netweaver BI (see the free BIScorecard BI Market report for specific module names) have historically lagged solutions from BI pure-play vendors. SAP has become an important base for BI vendors to sell to. The most recent release of SAP Netweaver BI (version 7 released June 2006) offers significant improvements, but forces customers to upgrade the entire SAP Netweaver BI infrastructure, info cubes and all, making the pace of upgrades slow. Business Objects XI, meanwhile, offers customers of earlier BW versions a stronger BI solution. Customers can expect a number of modules from Business Objects XI to become part of the Netweaver BI product, complementing (rather than replacing) interfaces such as SAP Business Explorer. SAP meanwhile, brings MDM and in-memory capabilities to Business Objects.

On the Performance Management front, there is more product overlap following SAP's recent acquisition of OutlookSoft and Business Objects' Cartesis. This is the area that will warrant some product rationalization.

While industry heavy weights, SAP, Oracle, and Microsoft continue to duke out market share in this hot space, this most recent move will make it harder for Cognos, MicroStrategy, and IBI. Care to place bets on IBM, HP or Teradata jumping into all this?

Cindi Howson, Founder, BIScorecard, a Web site for in-depth BI product reviews Author: Successful Business Intelligence: Secrets to Making BI a Killer App Author: Business Objects XI (R2): The Complete ReferenceAn interesting spin to this acquisition versus others is that Business Objects will remain a separate company under SAP's ownership... which could offer customers and prospects the best of both worlds... So where's the catch?... Customers can expect a number of modules from Business Objects XI to become part of the Netweaver BI product, complementing (rather than replacing) interfaces such as SAP Business Explorer. SAP meanwhile, brings MDM and in-memory capabilities to Business Objects.

Comment  | 
Print  | 
More Insights
The Agile Archive
The Agile Archive
When it comes to managing data, donít look at backup and archiving systems as burdens and cost centers. A well-designed archive can enhance data protection and restores, ease search and e-discovery efforts, and save money by intelligently moving data from expensive primary storage systems.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Government Oct. 20, 2014
Energy and weather agencies are busting long-held barriers to analyzing big data. Can the feds now get other government agencies into the movement?
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A roundup of the top stories and trends on InformationWeek.com
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.