Europe Consolidates for BI Invasion Force

Europe Consolidates for BI Invasion Force

October 8, 2007: After months of speculation, SAP has finally put the cash on the table for a ‘friendly’ takeover of business intelligence provided Business Objects, in a massive deal that will see further consolidation in the BI market.

The German based SAP will make a cash offer 42 euros ($73.6) per ordinary share with the transaction amount expected to his the AU$7.52 billion mark. The tender offer has been approved by the Business Objects Board of Directors, with the offer expected to soon be recommend to shareholders.

The move comes after months of analyst predictions and industry rumours. SAP has been keen to find the last pieces while consolidation by other major industry players has left Business Objects vulnerable to the taking. The fit makes sense, but not just because of the European connections.

According to Bernard Liautaud, Chairman and Founder of Business Objects, the combination of SAP and Business Objects will create a powerful force. “It means that we can truly amplify the reach of business intelligence, from the C-suite to Main Street,” he says.

“SAP will accelerate its growth in the Business User segment, while complementing the company’s successful organic growth strategy,” continues Liautaud. “SAP can now take the opportunity to focus on the industry’s next high-growth opportunity, by accelerating and enhancing our efforts for the Business User category.”

Meanwhile the announcement has received mixed reaction from other industry players in the market. John Hoffman, general manager of Altis Consulting an independent consultancy specialising in BI and datawarehousing implementations, the acquisition represents another major vendor move to fill in the missing gaps.

“It’s another step in the consolidation of the BI sector and demonstrates the willingness of today’s leading IT multinational vendors to spend big when it comes to attaching this missing piece to their market offering,” he says.

Hoffman suggests the acquisition could have positive affects for local customs by simplifying the diversity and choice in the market. “It reduces the number of software vendor choices to a manageable three or four and decreases the number of different product roadmaps that customer have to take into account when selecting a supplier,” he says.

All up, Hoffman believes it’s a good time to be a consultant in the BI market. “Independent consultants such as Altis will continue to succeed in this market by being vendor agnostic and offering independent strategy and implementation teams free of multinational vendor marketing spin.”

Paul Beks, regional director of Information Builders, a mid-range player in the BI space sees the consolidation in the market as only natural and good news for the nice players. “It’s very good for SAP customers, but perhaps not so good for Business Object customers who want to move on to something else,” he says.

“You need people like SAP to be able to cooperate with the IBMs and Microsofts. As those mega vendors approach the market of trying to take all the ownership, there’s going to be a conflict and there needs to be a mediator. We’re happy to be that!”

Beks sees an opportunity for Information Builders to now fall further into the mega-vendor independent arena. “We’re been able to build a solution that is able to connect to everybody,” he says. “We’ve quite often been that middleware people use to connect and we can enable that same strength to get generic reporting across those different reporters.

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