SAP Buys Business Objects

October 8, 2007 at 1:13 pm | Posted in NetWeaver, SAP | Leave a comment

PC World reported that SAP announced its intention to purchase Business Objects for $6.78bn. That’s a pretty hefty hunk of change for a vendor that is known as non-acquisitive. But SAP has done acquisitions. It just does less of them then than its free-spending rivals and tends to purchase technologies that can help them grow rather than directly trying to purchase growth by buying their way into new spaces and buying customer bases. Still, SAP has done its fair share of acquisitions, including TopTier and Frictionless Commerce.

There has been a noticeable difference in their approach to business intelligence however. They’ve been on a warpath in 2007 to build out capabilities around business performance management (the other BPM – not business process management). They kicked it off in February by acquiring Pilot software. Then in May they acquired Outlooksoft. The Outlooksoft press release made their objectives clear:

Todays announcement marks another milestone in SAPs multi-year plan to holistically address the increasingly sophisticated requirements of the CFO around driving business performance, managing risk, ensuring compliance and spearheading financial transformation in their organizations.

So the acquisition of Business Objects isn’t a surprise in itself. It’s just a surprise that other parts of the Netweaver portfolio that have been screaming for an acquisition have been continually left to their own devices – namely content management and collaboration (which is shoehorned under “knowledge management”).

SAP has had an opportunity to use Netweaver as a sales leader rather than an ERP followon. Even if they do not want to sell Netweaver as a standalone product, emphasizing the quality of its components – possibly by branding them – may help with market expansion.

So far this opportunity has not been taken advantage of, but Business Objects may signal a change. SAP has stated they will continue to sell it as a standalone product. And in my view, fears that it will become overly tilted toward SAP applications are unfounded. TopTier was a best-of-breed independent product that connected to SAP and non-SAP environments. SAP pledged to continue it’s independence and it did. There was an overall decline in building out connectors by all portal vendors as web services became more prevalent, so all portal vendors have cut back on production of these – not just SAP.

So, historically, SAP has a track record of maintaining the “Swiss army knife” ability of the products it purchases to connect to multiple environments. SAP has realized openness is critical in sales cycles when SAP is presented with the problem of how it can integrate with non-SAP pieces. I predict SAP will maintain the openness of Business Objects.

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