SAP Talks Up Business Objects Union
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PALO ALTO, Calif.--Eager to start seeing some return on its $6.7 billion splurge for Business Objects, SAP took the wraps off nine new business intelligence and business optimization software packages Wednesday that are designed to give enterprise customers the ability to monitor and respond to business information regardless of the format or application from which it's derived.
The new products, which will be available at the end of the month, will be sold by both companies' sales teams and, according to CEO Henning Kagermann, illustrate how the freshly merged organizations will "help people address the most important transformational issues they will face in the years to come."
"Our key competitive differentiator is that we're building a portfolio on the most open platform," Kagermann said during a media briefing at SAP's Palo Alto, Calif. campus. "We are the only one that can offer business performance optimization in a closed loop. At the end of the day, you have to take immediate action. Our business suite and business intelligence close the loop. You have faster and better insights and you can transform it immediately into actions."
The new jointly developed enterprise packages include Financial Performance Management (FPM); Governance, Risk and Compliance (GRC), Visualization and Reporting, Data Integration and Data Quality Management, Enterprise Query, Reporting and Analysis and Master Data Services. SAP is also rolling out three new offerings for the small- and mid-sized business (SMB) market: SAP Business All-in-One with BusinessObjects Edge Standard, Crystal Reports Server and BusinessObjects Edge Series.
When SAP broke from tradition in October with its $6.7 billion bid for Business Objects, some analysts suggested the merger was a knee-jerk reaction to arch-rival Oracle's relentless acquisition strategy, particularly its $3.3 billion purchase of business intelligence software provider Hyperion Solutions in March.
Kagermann said the prompt delivery of the jointly developed BI packages proves SAP is well on its way to successfully integrating Business Objects' technology and personnel and could do it again if the opportunity arises.
"You never in life should exclude an opportunity in business," he said. "The question is where is your priority. Growing through organic growth is No. 1 for SAP. If there's a unique opportunity to expand our opportunities, we will do it. These are things you can't plan ahead and sometimes you have the opportunity and must take advantage of it."
Business intelligence and business optimization is among the fastest-growing segments in the enterprise software market, growing at between 9 percent and 12 percent a year, according to IDC. In the U.S. alone, companies spent more than $15 billion on BI software in 2007.
"We will deliver business optimization and intelligence that are open," Leo Apotheker, SAP's deputy CEO and president of customers solutions and operations, said. "We want to be totally open to all underlying data sources and data warehousing and transactional applications. Our customers will benefit from the convergence of our market-leading solutions."
Business ByDesign gets 'accelerated investments'
As for Business ByDesign, the company's first on-demand, software-as-a-service offering for the mid-market, Kagermann said SAP engineers will pick the best features from Business Objects and incorporate them in one end-to-end offering so that it's "more or less transparent" to the end user.
On Monday, SAP announced preliminary fourth-quarter and year-end results, reporting that sales were up 10 percent for the year-ago quarter to $4.9 billion and software and services-related sales rose 14 percent for the quarter. However, operating margins for fiscal 2007 will check in around 26.5 percent, down from 27.3 percent in 2006. In its release, SAP said the dip in operating margins was mainly a product of "accelerated investments" in Business ByDesign.
Kagermann would not say how many customers are currently using Business ByDesign, only that "we want to prove in 2008 that we are volume ready in all areas. If this were a normal product it would be ready to go to general availability. But it's not a normal product. We still have a ways to go to build a profitable business [with Business ByDesign].
Apotheker added SAP has established "significant milestones" for Business ByDesign, reports the cost of its development each quarter and has "never communicated" the number of active users.