IBM and Business Objects Forge Closer Ties - InformationWeek

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6/1/2007
12:20 PM
Doug Henschen
Doug Henschen
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IBM and Business Objects Forge Closer Ties

IBM and Business Objects announced on Tuesday that the two companies will deepen the strategic alliance they announced last November. It's an indication that IBM does not discount BI - contrary to some suggestions - as just the tip of the iceberg. IBM has partnerships with both Business Objects and Cognos, and it's free to work with, rather than against, other independents in a market that is far from consolidated.

IBM and Business Objects announced on Tuesday that the two companies will deepen the strategic alliance they announced last November. They'll do so by developing joint solutions for the Asia Pacific market, extending already close ties in the North American and European markets. It's an indication that IBM does not discount BI - contrary to some suggestions - as just the tip of the iceberg. Okay, so IBM doesn't own a major BI/performance management player, as Oracle now does with its Hyperion purchase, and it's not offering its own reporting and analysis technology, as is Microsoft, but IBM does have partnerships with both Business Objects and Cognos, and it's free to work with others as well (as it does with Information Builders in the iSeries server market).IBM and Business Objects have more than 8,000 shared customers around the globe, but Asia Pacific is getting more attention because it's red hot. "There's enormous growth across Asia, and it's not just in China," says Mark Hanny, VP of strategic partnerships at IBM. "The growth started with multi-national companies, such as Coca Cola, doing business in Asia, but it's quickly spreading to more regional companies that are pushing to become global players."

Hanny points to IDC research that foresees $66 billion in IT sales across Asia by 2010, up from $43 billion this year, and he adds that more than 1,000 of those 8,000 joint IBM/Business Objects customers are in the Asia/Pacific region. The joint solutions being developed include data visualization and data analysis for research and clinical environments in life sciences and health care firms, customer profiling solutions for credit card companies and retail banks, and BI and analytic solutions for public-sector educational institutions.

IBM turned to Business Objects for an Asian push in large part because of its Crystal heritage and the BI vendor's recent push into the small- and midsize-business enterprise (SME)market. The Asian markets are dominated by SMEs, so products such as the recently announced C-1000/C-3000 Dynamic Warehouse appliance/Crystal Reports Server bundles will have particular appeal.

"The Dynamic Warehouse bundles have been rolling out in Asia Pacific over the last month and they've been well received," says Allen Pancoast, the Business Objects VP who heads up the IBM alliance. "That demonstrates the appetite in the Asian market for BI solutions."

Should we read anything into IBM's ever-closer ties with Business Objects? I've certainly heard speculation that IBM will ultimately acquire Business Objects, but those kinds of rumors have circulated before. I closely watched IBM's conservative approach through years of consolidation in the enterprise content management market. Finally, when EMC was on the verge of eclipsing Big Blue in that market, IBM acquired FileNet, which was pretty much the Business Objects of content management independents at the time (in terms of market size and industry leadership).

Last fall, Ambuj Goyal reiterated IBM's long-standing position on BI acquisitions, and in doing so he made it clear that leadership in the larger information management industry - not just the BI subcomponent - is the focus for IBM. Much has happened since then - Oracle-Hyperion, SAP-Pilot, Business Objects-Cartesis, TIBCO-Spotfire, SAP-Outlooksoft - but the question for IBM is, does it benefit the company more to work with, rather than against, Business Objects, Cognos, SAS, Microstrategy, IBI and other independents? Unless a competitor makes a play for one of the biggies (particularly Business Objects), my guess is that IBM will sit tight and await further market consolidation.IBM and Business Objects announced on Tuesday that the two companies will deepen the strategic alliance they announced last November. It's an indication that IBM does not discount BI - contrary to some suggestions - as just the tip of the iceberg. IBM has partnerships with both Business Objects and Cognos, and it's free to work with, rather than against, other independents in a market that is far from consolidated.

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