SAP's Business Objects Buyout: The Integration Angle

Loraine Lawson

By now, you're well aware that SAP bought out Business Objects in what the press release termed a "friendly take-over." The analysts and pundits are pretty excited about it, which makes sense, given Business Objects' dominance in the BI space.

But stock prices aside, what does this mean for the average IT department?

Unlike many mergers, this deal involves giants, and that means there will be plenty of businesses impacted long-term, for better or for worse. The fact that SAP is a heavyweight doesn't need further commentary. And Business Objects CEO John Schwarz has been quoted as saying that Business Objects is three times bigger than Hyperion.

Hyperion, you'll recall, is the BI company Oracle acquired. So, obviously, there's been a lot of discussion about what this acquisition means for the ongoing SAP/Oracle rivalry. (Hint: Unlike sports rivalries, it doesn't involve anything so fun as tailgating.)

It's still early, and Business Objects will remain a standalone company. SAP promises this buy-out is about growth, not cost reduction. So it's hard to predict at this point what this will mean in terms of integration.

But SAP customers should certainly expect integration of Business Object's BI functionalities at some point, and vice versa. According to this post from Webware, approximately 40 percent of Business Objects' customers use SAP, and about 20 percent of Business Objects' business overlaps with SAP in the performance-management software side. Between them, SAP and Business Objects offer three financial consolidation products, according to the Webware item.

But beyond the obvious potential for integration between SAP and Business Objects, how will it impact integration? Forrester's Boris Evelson tackled this topic in a recent post, as did, to a lesser degree, IT Toolbox blogger Vincent McBurney.

If you're an SAP or Business Objects customer, I suggest you read the full posts. However, if you're short on time or just curious, here are a few key items I culled from their analysis:

  • McBurney contends the deal puts Oracle behind SAP and IBM when it comes to data integration. IBM and SAP have better ETL, data quality, profiling and metadata management tools, he writes, which makes it easier for them to offer end-to-end solutions. Meanwhile, Oracle is stuck paying OEM license fees for Informatica PowerCenter and IBM DataStage. "Oracle needs to add more data quality and metadata functionality or buy more data integration tools," he writes.
  • Evelson also says that this could make the duo a leader in converging data and process. Traditionally, BI vendors focus on data, but as Forrester points out, SAP understands that the business world is about processes and data is just the by-product. So, expect SAP to push for embedded business intelligence in workflow processes.
  • Business Objects recently acquired text mining vendor Inxight, so you could see better capabilities around unstructured text that could help, among other things, with fraud detection and risk management, according to Evelson.
  • The bad news, if you're SAP, is that Business Objects comes with existing integration problems, according to Evelson. Business Objects hasn't managed to completely integrate its own products, including Crystal, full client BI, WebIntelligence and Voyager, to name a few. Evelson explains the problem and points out that SAP will have to tread carefully if it doesn't want to make this integration problem worse.
  • Evelson raises the question of what this will mean for SAP's partnerships with other BI vendors, such as Cognos and SAS, as well as Business Objects' relationship with Oracle.

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Add Comment      Leave a comment on this blog post
Oct 11, 2007 7:28 PM Vincent McBurney Vincent McBurney  says:
Thanks for referencing my story. There is a lot of focus on the Business Objects BI tools but the data integration products of Business Objects are worth a big slab of money and have a good market share. SAP signed an OEM deal with Informatica a few months ago that they are probably regretting now - it puts Informatica PowerCenter, PowerExchange and Metadata Manager into SAP performance management and analytic applications and into NetWeaver for MDM and BI. That's a lot of license revenues and market share to Informatica that they could have sent to Business Objects. These deals have a signed contract and I'm waiting to see if SAP can wriggle out of it. Reply

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