SAP To Buy Business Objects

"SAP announced Sunday afternoon it plans to acquire Business Objects in a cash deal valued at slightly more than $6.8 billion. The acquisition, which is expected to close in the first quarter of 2008, is SAP's largest acquisition ever. The deal is especially noteworthy for SAP, which has tended to favor developing its own technology, rather than acquiring it. The acquisition of Business Objects, a leading player in business intelligence software, is designed to dovetail into SAP's previously announced strategic plans to double its addressable market by 2010, said Henning Kagermann, SAP chief executive, during a press conference Sunday afternoon." reports CNET.com. See also here and here.

Well this one was fairly well signposted - once Oracle acquired Hyperion (traditional BI tool of choice with SAP) and Siebel (the packaged Siebel Business Analytics apps being originally designed around SAP) acquiring Business Objects was always a fairly obvious strategy. I'm not sure I'd be too pleased if I was a Business Objects customer or member of staff, I can't see BI being a key driver for SAP and it's usually their strategy to build their own tools, rather than acquire other companies - getting acquisitions right takes a lot of experience, witness Oracle's takeover of Siebel compared to the acquisition of IRI ten years or so ago.

Still, it makes a lot of sense of Business Objects' stockholders, and you wonder now how long it'll be before IBM or Microsoft makes a move on Cognos and/or Informatica. Pretty soon, the main three players in the BI space will be Oracle, IBM and Microsoft with SAP making an appearance through Business Objects, quite a change from a couple of years ago when it was Cognos, Business Objects and Hyperion. As long as this takeover from the big boys doesn't lead to a loss of innovation in the sector, it should be good news for customers that also leads to an increased emphasis on BI within all applications, not just the narrow reporting and analysis niche.