SAP to Buy Business Objects

10/10/2007

SAP announced this week that it will acquire Business Objects for $6.8 billion. This is a major milestone for SAP, which in its 35-year history has never made an acquisition of this magnitude. Together, SAP and Business Objects intend to offer high-value solutions for process- and business-oriented professionals. The solutions will be designed to enable companies to strengthen decision processes, increase customer value and create sustainable competitive advantage through real-time, multi-dimensional business intelligence (BI). Here, industry analysts share thoughts on the implications that the acquisition will have on the consumer goods community:

"SAP has long been strong at systems that manage and track business processes in consumer products companies of all sizes, but it's also been criticized for lack of usability on the BI front. For years, we've strongly encouraged SAP to take more decisive action in this area. The Business Objects BI/PM products will go a long way toward filling that gap. But, it's still unclear "how much" and "how soon" proposed BI/PM integration will impact SAP products and its customers. There's no question that consumer products companies need and want better insight and into demand, supply, product and financial processes. We'll closely monitor the progress of this acquisition to judge whether SAP truly exploits the enormous potential of this acquisition." - John Hagerty, Vice President & Research Fellow, AMR Research

"The combination of SAP and Business Objects continues a recent trend among the leading software providers to join forces with complementary application offerings. In this case, the combined power of SAP's transactional and datawarehousing capabilities (with its Business Warehouse [BW] solution) with the information management and reporting strength of the Business Objects' suite will give SAP's client base a much anticipated boost in how information is accessed and used to drive business performance." - Alan Langhals, Principal, Consumer Business, Deloitte Consulting LLP

"The acquisition of Business Objects by SAP, which is a major diversion from SAP's historical focus on organic growth, presents a great opportunity as well as a possibly significant challenge to companies within the consumer goods industry. Business Objects, with its deep Business Intelligence functionality and flexible and user friendly reporting, provides SAP customers with the opportunity to improve analytical reporting capabilities significantly. The challenge lies in the future product positioning between SAP/SEM and Business Objects XI, in particular around Enterprise Performance Management, as both companies have strong solutions in this area." - Frank Ritter, Director Business Intelligence, Clarkston Consulting

"I guess SAP's acquisition of OutlookSoft and Pilot Software were not enough as they announced their intention to acquire Business Objects to bulk up in the BI and Performance Management markets. What does it mean to you who might be a customer of Business Objects or SAP? If you are in the middle of evaluating SAP or Business Objects products in analytics, BI and Performance Management products, you should take heed to the rocky future. Organizations that are evaluating SAP should stop and perform a thorough review before proceeding on new or existing projects. SAP current products, like SAP SEM, SAP NetWeaver BI, SAP BW and even newly acquired OutlookSoft, are part of the overlap with Business Objects. Those of you that are Business Objects customers or evaluating their products should take a deep breath and evaluate the impact to your existing and planned deployments. While SAP plans to have Business Objects as a separate organization the reality is that their will be significant changes to existing products to ensure they integrate effectively with SAP." - Mark Smith, CEO, Ventana Research