SAP to acquire Business Objects

Added by The Editor, 9 months ago.

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German applications giant SAP has announced that it is to acquire Paris-headquartered business intelligence (BI) provider Business Objects for €4.8 billion ($6.8 billion).

The price that SAP has paid for Business Objects is the most the German company has ever paid for an acquisition, and represents the largest transaction ever in the BI space. By buying Business Objects it has also added some 44,000 customers to its roster.

According to SAP executives, while there is some overlap between Business Objects' and SAP's performance management and BI tools, they will all, for the mean time at least, be maintained.

Our take: This deal will make SAP one of the world's business intelligence powerhouses. Both SAP and Business Objects have expressed ambitions in the past to expand into the mid-market, where business intelligence is currently under-utilised, and to benefit from online software delivery. CrystalReports.com, which is owned by Business Objects, is the most mature of the few business-intelligence-as-a-service offerings available. And while this acquisition, along with Oracle's purchase of Hyperion earlier this year, means that the BI market has now largely consolidated, it is still set for healthy growth. According to a recent report from analysts at IT market research company Gartner, the global BI market will double in size by 2012, from just under £2 billion in 2006. That's a compound annual growth rate of 12.5 per cent.

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Mike Perks, 9 months ago

As with other sectors, market consolidation looks likely to continue and I’d imagine smaller players will be thinking very hard about whether to differentiate completely or strategically assimilate competitor’s products, to some degree at least. Although no one company currently holds a huge market share in the BI arena, those left standing alone offering similar product suites will undoubtedly find it harder to survive as larger organisations become ever more dominant - appearing to offer fully integrated solutions that satisfy the majority of needs. That said, product agility and retaining distinct solutions can easily become obstacles for larger players as they seek product alignment and struggle to integrate old with new. There is plenty of room for smaller players to capitalise on a lack of a single product purpose, with the ability to respond rapidly and more readily embrace innovative to offer best-of-breed products – for which there will always be a market.

Victoria Furness, 9 months ago

Organisations will always need business intelligence - especially as data continues to grow at a rapid rate - and SAP's acquisition makes sense if it is going to build this intelligence into applications, so you can interrogate sales data in the CRM system, for example, or sort HR information to determine which benefits are popular with different employee segments, perhaps. With Oracle's acquisition of BEA Systems earlier this week (having already bought BI vendor, Hyperion) it does leave one wondering, however, what will happen to the other mid-market software players and, of course, their customers...