Business intelligence software customers may find that
their buying decisions are easier after Business Objects' planned
acquisition of rival Crystal Decisions.
The company said the $820m (£509m) merger, announced on 18 July,
will give it the lead in the business intelligence market and open
up new cross-selling opportunities and wider geographic
penetration.
Additionally, Business Objects hoped to be able to attract
companies looking to standardise on just one business-intelligence
applications supplier.
Although both suppliers offer reporting products, they serve
different needs, said John Olsen, president and chief operating
officer of Business Objects.
He explained that Crystal's products are used by IT
professionals to design reports and send them out cheaply to tens
of thousands of users, whereas Business Objects' applications are
tailored to power users who need to format their own queries on the
fly and do extensive dicing and slicing of the data.
There are no existing plans to phase out any applications and
all rollouts will continue as scheduled, Olsen said. While the
integration roadmap will take several months to cobble together, he
predicted that the first step will be to roll out a portal giving
users access to both companies' reporting applications from a
single interface.
That announcement was reassuring to David Rewerts, IT systems
analyst at Principal Financial Group. Although Principal uses
Crystal software, it is primarily standardised on Business Objects,
relying on products such as the WebIntelligence application.
The combined resources of the companies would most likely result
in better efficiencies of scale and improved research and
development efforts, Rewerts said, adding that it also demonstrates
the business health and long-term viability of Business
Objects.
"One of the things we really look at when looking at suppliers
is their market strength," he said. "Anytime they show their
financial strength just helps build our story [internally]."
Such optimism is not universal, despite the official
reassurances.
"I have yet to see a merger of companies making similar products
in which one or both products weren't significantly affected," said
Charles Castleberry, assistant director of IT architecture at Los
Angeles-based Fox Filmed Entertainment, a subsidiary of Fox
Entertainment Group.
The company uses Crystal products for decision support. Given
its widespread use, Castleberry expects to see Crystal Reports
continue to be used for report development and simple deployment,
possibly even replacing Business Objects' own development tool.
On the other hand, it is likely that the Business Objects
analytical tools will become more widely used, as that technology
is the company's forte.
From an industry point of view, this is just the beginning of
widespread consolidation aimed in part at fending off Microsoft,
said analyst Eric Rogge at Ventana Research.
It also means that smaller suppliers may either fade or be
acquired, as companies such as Business Objects and Cognos roll out
more integrated product lines, he added.
Meanwhile, Hyperion Solutions announced a deal to acquire query
and reporting tools supplier Brio Software in a cash-and-stock
transaction valued at about $142m. Hyperion expects to complete the
purchase of the company by the end of the year.
The two suppliers have a combined revenue of $613m during the
past 12 months, according to Hyperion.
Jeff Rodek, Hyperion's chairman and chief executive officer,
said that the acquisition of Brio will give his company a full set
of data analysis tools for supporting both strategic and day-to-day
decision-making related to corporate business performance. Hyperion
also signed a separate agreement that lets it start reselling
Brio's products immediately.
Marc L Songini writes for IDG News Service