What does future hold for Business Objects after £3.4bn SAP takeover?

SAP's £3.4bn acquisition of Business Objects last week could be good news for users, providing there is no erosion of the business intelligence software's general-purpose capabilities, analysts have said.

SAP's £3.4bn acquisition of Business Objects last week could be good news for users, providing there is no erosion of the business intelligence software's general-purpose capabilities, analysts have said.

Although the software will boost SAP's enterprise reporting tools family, questions remain about how well a firm as large as Business Objects will integrate into SAP's structure, and whether Business Objects products will remain independent.

SAP and Business Objects intend to offer software that uses real-time data analysis to enable companies to improve decision-making.

Prior to the acquisition, Business Objects, along with Cognos and SAS, were the main providers of independent data analysis tools not linked to either Oracle or SAP's enterprise software. The benefit of these products is that they can pull in data from many different ­applications to produce reports and dashboards that can help end-users make informed business ­decisions.

SAP and rival Oracle have been keen to expand their product ranges to support these tools. In March, Oracle spent £1.6bn on enterprise performance management specialist Hyperion, which provides financial and performance management tools for SAP systems. SAP's acquisition of Business Objects is regarded by analysts as a response to this.

Companies using Business Objects software include Virgin, which uses it for store-based web-reporting, and Tesco, which runs the software alongside Teradata as part of a centralised management information system to create a single set of key business performance indicators across the company.

Philip Howard, director of research technology at Bloor Research, said the fact that SAP has stated that Business Objects will continue to operate as a separate entity could be good news for users because the product will not be locked into SAP's system.

"Other acquisitions that SAP has made have tended to end up being engulfed," he said.

Businesses that do not run SAP may be concerned that SAP will try to tie the Business Objects tools into its ERP suite and middleware products, said Howard. "The big danger is that SAP starts to ask Business Objects to develop products specifically for the SAP market, to the detriment of its general-purpose capabilities," he said.

Duncan Jones, senior analyst at Forrester Research, said, "The acquisition could be good news for SAP users because they will be able to purchase an integrated business intelligence package that is supported by Oracle."

For non-SAP users, Jones said, "There is no reason for Business Objects users to switch to SAP. The value of Business Objects is that the software works for everyone, not just SAP users."

Helena Schwenk, senior analyst at Ovum, said the challenge for SAP was to integrate a company of Business Objects' size.

She added that the purchase was a response to Oracle's takeover of Hyperion. Although SAP was unlikely to back away from its partnership with Hyperion, Schwenk said, "We expect SAP to use Business Objects to provide an alternative for its customers."

Schwenk said the Business Objects acquisition would bring breadth of business intelligence and performance management capabilities to SAP.

SAP's own business intelligence tool, Netweaver BI, has been designed for the needs of power users, said Schwenk. Business Objects could expand this by providing dashboards and end-user reporting.

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