What the SAP/Business Objects Acquisition Means for Data Managers

In October, SAP announced it would acquire Business Objects. This transaction happened amid a quickening pace of consolidation. Oracle bought Hyperion. Business Objects bought Cartesis. Oracle may buy BEA. So it looks like lots of applications are headed into the ERP stack. Data managers need to be on the look out. The best-of-breed BI that they are running or considering purchasing may soon have a completely new product roadmap ahead of it.

One-Stop Shopping

The only users truly in a position to benefit from the acquisition are companies that use both SAP and Business Objects, because they will be larger customers with more bargaining power and the post-acquisition entity will be in a position to offer better pricing because of economies of scale. This benefit will only happen in the long run.

Other users may not be so lucky. The real value from BI comes from extracting meaning from the databases in multiple platforms. Since SAP’s development and roadmapping is typically SAP focused, Business Objects users who do not use SAP or have highly heterogeneous operating environments should be concerned that their BI platform may become more suitable for an all-SAP environment than their own.

What Users Should Keep in Mind

Companies that are thinking about buying Business Objects today should reconsider that strategy. The SAP acquisition is not likely to drive faster innovation at Business Objects, but it may drive higher prices and some confusion as Business Objects employees determine where they fit in the broader SAP organizational chart. In the very long run, unless a company has already had a strong SAP presence, Business Objects is unlikely to be a good choice.

Companies that are considering adopting best-of-breed BI should be ready for integration challenges and make sure their vendors are offering technology and best practices to meet those challenges. Ideally, BI should be independent of - but tightly integrated with - ERP. However, the best-of-breed BI solution bought today may be acquired by an ERP vendor tomorrow. Companies will need to have the integration expertise on hand so that they will always be able to get value from their BI solution, no matter who owns it.

Companies that have integrated Business Objects with a non-SAP ERP system do not need to panic, but they should begin thinking about an exit strategy. SAP may be bureaucratic and slow moving, but it will eventually get around to changing Business Objects features and functionality in an SAP-centric way. When this happens, Business Objects users will probably have to spend more to continue getting rich analysis of non-SAP ERP data.

Companies that are using SAP and Business Objects should ask how this will benefit them, and be guardedly optimistic about the answer. These users are now bigger customers of SAP and should have better bargaining power. And acquisitions like this should result in economies of scale that reduce the cost of software for end users. But SAP has little experience in integrating large acquisitions and has been slow to change, improve, and integrate its own solutions. So it’s not likely that customers of both Business Objects and SAP will see many benefits in the near term.

Proving Cognos Right

Cognos has long been telling BI users that it should standardize on one BI platform. While they naturally profess that it should be Cognos, the pitch does have users’ best interest in mind. Having a BI platform extended broadly across the enterprise independent of, but tightly integrated with, the ERP stack means that you can get actionable conclusions from all your data with consistency without becoming more beholden to your ERP vendor.