Menu
SAP and Business Objects explain strategy shifts

SAP and Business Objects explain strategy shifts

Executives explain motives behind merger

Executives from Business Objects and SAP each tried to explain why their companies have parted with long-time strategies by agreeing to merge.

SAP announced Sunday that it would acquire the French-American business intelligence vendor for Euro 4.8 billion (US$6.78 billion), a move to expand SAP's customer base and secure it a place in the growing market for BI software.

It's a big change for SAP, which until now has shunned big acquisitions in favor of small "tuck-in" purchases to get new technologies that it doesn't have.

And it marked an even bigger change for Business Objects, a staunchly independent company that has always maintained it was not up for sale despite persistent rumors.

"To those of you who follow Business Objects, this might seem like a little bit of a surprise," said Bernard Liautaud, Business Objects' chairman and founder, apparently reading the minds of journalists at a news conference in Paris Monday. "For 17 years I have spoken in favor of Business Objects as an independent company. So why the change of heart?"

"If you look at developments in the software market, a lot has changed in the last year," he said.

Some big customers would prefer Business Objects to remain independent, he admitted, but there is also "an increasing number of clients who want a stronger alignment between their business applications and their business intelligence platform."

Business Objects was open to the merger because it will be able operate as an "independent business" within SAP, he said, and continue to offer products that work with applications from other vendors. "SAP understands our openness," Liautaud said.

One development in the software market he did not mention was Oracle's acquisition in March of Hyperion Solutions, one of Business Objects' few remaining independent rivals, for US$3.3 billion.

One analyst said Business Objects may have opted for a merger because it felt pressured by the consolidation around it. "Although Business Objects is a huge company, in a sense they are also a niche player," said Bo Lykkegaard, a research manager with IDC, adding that customers increasingly want to work with a smaller number of vendors who offer a wide range of products.

Even as he outlined the proposed merger plans with SAP, Liautaud continued to insist that Business Objects had not been for sale.

"Business Objects never decided to go on sale," he said. "Never did we ourselves wish to put the company up for sale."

Rather, SAP approached Business Objects in July -- one of several big companies that offered a buy-out, he said. "We were of course willing to listen," he said. "We studied the parameters" and decided that merging with SAP would be the best thing to do.

Leo Apotheker, SAP's deputy CEO, also had some explaining to do.

"We never said we would never acquire companies," he said at the press conference. "We've put the emphasis on organic growth, but we never said acquisitions were out of the question."

SAP still intends to grow its core ERP business organically, he said, speaking in fluent French. "However, the business intelligence market is a new market, and to reinforce our presence there we must reinforce our offering," he said.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments