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9/24/2007
01:50 PM
Cindi Howson
Cindi Howson
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Rumors, Shareholders and Customers

I wasn't going to comment on the rumors about Business Objects looking to be acquired, because it seems to be one that resurfaces every few months. If the rumor is true, it runs counter to all the positioning the vendor has been doing since Oracle acquired Hyperion... If Business Objects is in the market to be acquired, what does that suggest about its stated strategy: oops, change in direction?

I wasn't going to comment on the rumors about Business Objects looking to be acquired, because it seems to be one that resurfaces every few months and yet, everyone seems to keep asking me about it. If the rumor is true, it runs counter to all the positioning the vendor has been doing since Oracle acquired Hyperion. Business Object's positioning has been to emphasize the need for an independent, pure-play vendor that has no allegiance to a particular database or ERP system.

So if they are in the market to be acquired, what does that suggest about their stated strategy: oops, change in direction?A colleague of mine put an interesting spin on this, though: that the whole thing is just another rumor, planted most likely by someone who wanted to make money. Initially, I was shocked at this suggestion. But he had a point: of any of the acquisitions that have come to be (Oracle/Hyperion, Cognos/Applix, BOBJ/Crystal), none have started with rumors (SAP/OutlookSoft seemed like accurate speculation as opposed to informed rumors). Business Objects' stock price indeed had a solid spike last week.

If Business Objects were actually looking for a buyer, and if they had retained Goldman Sachs as the story suggests, then they no doubt would have now sacked Sachs for the leak. Then again, if rumors lead to a better price, maybe not.

While there are some merits to any of the leading BI/PM pure-plays to being acquired, there is more downside - at least from the customer point of view. BI can too easily become a bit-part when subsumed by larger ERP/RDBMS companies. Whether or not BI gets center-stage depends not only on funding, but on organizational issues. Kudos to Microsoft on its approach thus far, despite BI revenues paling in significance compared to SQL Server, Office, or XBOX for that matter. I contrast it with another broadly focused vendor, with deep pockets whose BI product is really quite good, and yet customers can't seem to get salespeople to talk to them about BI.

Some of these recent industry acquisitions are about acquiring market share in BI and PM, which are both still growing markets. Throwing BI or PM into an RDMBS or ERP deal can sweeten the deal. Acquisitions, though, are more often in the best interest of shareholders. Shareholders have a much shorter time horizon than customers. Not happy with the stock performance? Dump it. When you're not happy with your BI vendor's capabilities or strategy, it's very difficult to change course and throw out an existing deployment.

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 ReferenceI wasn't going to comment on the rumors about Business Objects looking to be acquired, because it seems to be one that resurfaces every few months. If the rumor is true, it runs counter to all the positioning the vendor has been doing since Oracle acquired Hyperion... If Business Objects is in the market to be acquired, what does that suggest about its stated strategy: oops, change in direction?

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