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