Oh yes, some very big news in the BI industry this past weekend as software giant SAP announced the intent to acquire BI company Business Objects. Finally the rumors have been put to rest and we can go on with our work, well some of us can. Being a former employee of both the Crystal Decisions and Business Objects there are likely a lot of people who are wondering the same, what will SAP do with Business Objects? Much of that is yet to be seen as SAP is typically not known for making large acquisitions. But what I wanted to cover in this post is not the ‘what’ but the ‘why’.
Many folks around the industry are scratching their heads about this acquisition, a few years ago it would have made a lot more sense for SAP as they partnered heavily with the software company to complete a BI offering that they couldn’t offer customer. Crystal Reports played heavily into the SAP offering to allow customers to leverage data within R3. But over the past few years the relationship has fallen to the wayside as SAP has become more aggressive in the space, releasing a host of BI applications and driving the premise of BI and business process with the extension of their Net Weaver platform. Not to mention the amount of technology overlap when you through in OutlookSoft, Cartesis, ALG, and SRC planning and budgeting technologies into the mix.
So the $7 Billion announcement might not be all good gravy on this past Canadian Thanksgiving holiday weekend but the acquisition does add a significant amount of power from a territory standpoint. SAP effectively puts a stamp on owning Europe in the enterprise software space. Throw in the recent acquisition of Cartesis by Business Objects and you certainly start to get the feeling we are back in the Roman empire. This is great news for customers, as the market consolidates they will be able to take advantage of more affordable software and simply deal with fewer companies.
If we take a minute to think about the cause and effect much of the cause of the this acquisition, from the initial onset it would appear this is clearly a move that allows SAP to add to their solution portfolio to become more competitive against Oracle. This makes sense, especially when you consider Business Objects has announced that they will continue their heterogeneous strategy allowing SAP to get their tentacles into customers where they wouldn’t normally be, ie. a Trojan horse on steroids. But before we jump to the obvious could there be other factors at work here, could this acquisition be more about Business Objects wanting to be sold than SAP wanting to drop $7 Billion on a ton of overlapping technology. The move was a significant one, but simply another piece of a puzzle that has been developing for the past 7 years.
A short history
Many folks around the industry are scratching their heads about this acquisition, a few years ago it would have made a lot more sense for SAP as they partnered heavily with the software company to complete a BI offering that they couldn’t offer customer. Crystal Reports played heavily into the SAP offering to allow customers to leverage data within R3. But over the past few years the relationship has fallen to the wayside as SAP has become more aggressive in the space, releasing a host of BI applications and driving the premise of BI and business process with the extension of their Net Weaver platform. Not to mention the amount of technology overlap when you through in OutlookSoft, Cartesis, ALG, and SRC planning and budgeting technologies into the mix.
So the $7 Billion announcement might not be all good gravy on this past Canadian Thanksgiving holiday weekend but the acquisition does add a significant amount of power from a territory standpoint. SAP effectively puts a stamp on owning Europe in the enterprise software space. Throw in the recent acquisition of Cartesis by Business Objects and you certainly start to get the feeling we are back in the Roman empire. This is great news for customers, as the market consolidates they will be able to take advantage of more affordable software and simply deal with fewer companies.
If we take a minute to think about the cause and effect much of the cause of the this acquisition, from the initial onset it would appear this is clearly a move that allows SAP to add to their solution portfolio to become more competitive against Oracle. This makes sense, especially when you consider Business Objects has announced that they will continue their heterogeneous strategy allowing SAP to get their tentacles into customers where they wouldn’t normally be, ie. a Trojan horse on steroids. But before we jump to the obvious could there be other factors at work here, could this acquisition be more about Business Objects wanting to be sold than SAP wanting to drop $7 Billion on a ton of overlapping technology. The move was a significant one, but simply another piece of a puzzle that has been developing for the past 7 years.
A short history
Let’s take a step back in time and remember the young budding software company with a vision for reporting. In the year 2001, it was Crystal Decisions who was quickly climbing the software ladder, growing nearly 30% year over year, when in 2003 came the announcement of a product called Reporting Services by Microsoft. Although the marketing teams refused to admit it, this announcement effectively ended the reporting business, it was time to get out and in the months to follow another acquisition occurs, the acquisition of Crystal Decisions by Business Objects. Although there are many other factors that likely came into play, at the end of the day it’s the age old by low and sell high by the team of SilverLake investors which drove the eventual sale of the Crystal Reports maker. Over the next few years Business Objects worked diligently to integrate the Crystal technology and add technical components to their BI story, technologies covering areas of data management, and performance management. On the other side of the spectrum, SAP continued to watch another major player, Oracle, continue enhance their ERP portfolio with acquisitions of Siebel and PeopleSoft and a number of industry specific apps. Then came another announcement from Microsoft of a little product called PerformancePoint, stamping a seal on Microsoft’s entry into the BI space, following this announcement was a flurry of technology acquisitions of BI and performance management companies, by just reading the last few months of blogs on this site you can get a flavor for how hot the market has been.
I’m not saying that Microsoft is the only reason the board at Business Objects decided to cash in on their investment but again it comes back to buy low and sell high. As the BI market continues to become a commodity how can companies like Business Objects and Cognos continue to compete, eventually all good times must come to an end. It has been very interesting for this performance guy to be part of the ride and see how things have unfolded. There are only a few more pieces in this BI puzzle to be completed, look for a Congos acquisition to follow in the next few months, likely by Oracle or IBM.
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