SAP's growth spurt: $6.8 billion for Business Objects

SAP's growth spurt: $6.8 billion for Business Objects

Summary: SAP took a page out of Oracle's grow-by-consolidation playbook in acquiring business intelligence leader Business Objects for $6.8 billion (42 Euros per share).


SAP took a page out of Oracle's grow-by-consolidation playbook in acquiring business intelligence leader Business Objects for $6.8 billion (42 Euros per share). SAP CEO Henning Kagermann positioned the acquisition as part of his company's strategy to rapidly grow its customer base. SAP wants to have 100,000 customers by 2010, more than doubling from its current base of about 41,200.

The forthcoming Business ByDesign is also part of the growth strategy, targeting the lower part of the mid-market, with 25 to 100 users of the software per customer. Business Objects has more than 40,000 customers, but there is some overlap between the two companies in terms of shared customers and SAP's own analytics software geared for its platform. In March, Oracle took Business Objects rival Hyperion off the table for $3.3 billion.


Business Objects will operate as a stand-alone business and become more tightly integrated with the SAP platform, the company said. The Business Object acquisition provides evidence that SAP is willing to spend serious money to grow, especially to fill in the key analytics area, with much broader reach, that complements its risk management and business performance management investments.

According to the press release, John Schwarz will continue as the CEO of the Business Objects division and join and SAP's Executive Board, and founder Bernard Liautaud is slated to be elected to the SAP Supervisory board. Doug Merritt, who had been in charge of Business Users working othen join the Business Objects division and report to John Schwarz.

Topics: Enterprise Software, CXO, Data Centers, Data Management, SAP, Software, IT Employment

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  • SAP is great if you want to shut your business down for 6 months

    Honeywell implemented SAP a few years ago to control not only inventory but also manufacturing operations.
    We had so many problems that we where bascially shut down for 6 months and doesn't include the 6 months of training we had before it came on line.
    Just say No to SAP!
    • Some good, some bad implementations...

      I'll bet if we looked at the entire implementation process, we'd find that SAP wasn't really the problem...people were the problem. I've seen SAP implentations go live without so much as a hiccup, and I've also seen cases like yours and worse. I can say the same for Oracle implementations, Baan implementations, MAPICS/Syteline implementations, MAS500 implementations, you name it... Apparently enough people see ROI from SAP that they stay put once they're in the door for the most part, and the steady stream of newcomers never seems to slow. As a business owner, I seriously doubt I'd ever have the need for the width and breadth SAP offers. If my revenues ever reach billions or trillions and I have offices around the globe, I just might need to revise that opinion.
    • We fondly call it

      At Honeywell we fondly call it Stop All Production.
      • RE: SAP's growth spurt: $6.8 billion for Business Objects

        You by no means be acquaint with i'm sorry? Is change for the better designed for by hand, be keen on <a href="">zoloft</a>.
  • SAP Rules

    Sorry to hear what happenned at Honeywell . However, if SAP is that bad...why there is a such demand for SAP skills outthere. Peopl who do not know SAP hates it because they do not make a a good living like the SAP people do.

    We are on of the of the biggest SAP customer and we have many successful implementations as we have the good people who know SAP well.
    • These complex, vendor-specific products....

      ....are very difficult to implement in large-scale environments. SAP, Business Objects, Oracle Appserver/Portal/FinApps, WebLogic Portal - all nothing but trouble in a big environment.

      The vendors cannot possibly test them under the actual conditions of use. They'd have to hire hundreds of developers, administrators, and DBAs and have them work for years to produce a test environment that is as complex as some of the big companies.

      It's no surprising that consultants who know what to do are in high demand. If you'd already spent $100 million and had a giant system that doesn't work very well, you'd certainly be open to hiring a few guys for $1000 a day who you think can straighten it out.
  • RE: SAP's growth spurt: $6.8 billion for Business Objects

    Business Intelligence and Data Quality Management are the emerging and promising business concept with a great future. SAP is already a major player in ERP systems.ERP and CRM implementations most of the times are failing to provide the expected returns, and one of the major cause of this problem is poor data quality and accurate data analysis.Business Objects is an respected brand in DQM and BI area, by acquiring it SAP has taken a very right step strategically.SAP now have a vast pool of potential
    categorized as follows:
    In one category come the existing customers of SAP which might be having some problem with data quality and analysis. Now SAP has a lead to follow.
    Second category contains the existing customer of Business object and the customers which are planning to implement ERP or CRm systems SAP can provide them with both the tools at the same time making their task easy and saving the cost SAP incurs in implementing the systems at client site by implementing the both systems at a single time saving time to study and match organizational business processes.
  • RE: SAP's growth spurt: $6.8 billion for Business Objects

    While SAP was pursuing it's growth from within strategy, Oracle got to cherry-pick Hyperion and Siebel Analytics. This move comes from weakness, not strength. I wrote more about this here: