Author: Jatin Shah, Datamatics Ltd.

SAP recently announced its plans to acquire Business Objects for $6.8 Billion. BI-Group has closely followed this announcement & would like to share the perspectives on the impact of this acquisition on the BI market.

This acquisition is a continuation of a shakeout process in the BI market space. Although Business Objects has grown to considerable size through a long series of acquisitions, the acquisitions have masked some fundamental weaknesses in its technology offerings. Business Objects’ BI products are fragmented, lacking both scalability and integration, making them inappropriate for many applications in the new generation of enterprise BI.

It is believed that Business Objects needed and was so eager to be acquired because it had accumulated a large collection of non-integrated technologies in a market where organic technical integration is essential for providing enterprise BI solutions.

SAP rushed into the purchase of Business Objects and paid a premium price, even though Business Objects warned that Q3 revenues and earnings would be well below Wall Street estimates. One must wonder whether the acquisition was a defensive move by SAP to prevent a competitor from acquiring Business Objects.

Unless SAP maintains Business Objects purely as a portfolio investment, it is likely that Business Objects’ architecture will change to improve integration with the SAP suite & that the customers will be forced to undergo even more major migrations.

As SAP influences the Business Objects’ product set to be more aligned with the needs of the SAP BI architecture, the architecture and design priorities of Business Objects’ products & technology will become even less applicable and likely move away from data warehousing.

There is significant overlap within SAP and Business Objects’ technologies and product suites. Customers with products that are undergoing integration will face painful migrations. Customers with products that are not being integrated face the likelihood that SAP will slow down development on those products, and ultimately end them.

Few of the significant areas of product overlap between Business Objects and SAP are as follows:

Posted on January 22nd, 2008 by Guest
Filed under: Business Intelligence

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