SAP BusinessObjects Explorer Is New Star at 20th U.S. SAPPHIRE
Friday, May 15, 2009
Bruce Richardson
If my calculations are correct, last week’s SAPPHIRE was the 20th that SAP has hosted in the United States. Next year will mark the 20th anniversary of the first one, which I recall as a small event held in New Jersey.
In viewing my reports from many of the recent SAPPHIREs, I noticed that I usually opened with the same complaint: SAP spends a small fortune hosting an event for 10,000+ of its largest customers and prospects, but neglects to try to sell anything during the keynotes.
I’m happy to report that co-CEO Leo Apotheker used most of his hour-long opening slot to sell, sell, sell. The most exciting new product is SAP BusinessObjects Explorer. SAP customers and partners may know it as Polestar.
The new Explorer allows customers to load and manipulate enormous volumes of data in memory, where it can be accessed instantly. At the press conference, one executive from Molson Coors said she loaded 900 million records. Searches across all of the records took less than three seconds. She was so impressed that she compared the velocity to that of the Space Shuttle launch she had witnessed the night before.
She taught her business users how to use the software after only a “five-minute WebEx training.” For her, the primary benefit is the ability to reduce the time needed to make a decision from one day to one hour.
Similar results were reported by an executive at Sara Lee. He said he loaded 290 million to 300 million rows of production data into Explorer. He deployed the software in three days and gave it to business users without providing any training. They took to it immediately.
Both agreed that with traditional tools, you may spend half your life on performance tuning. Given the speed of Explorer, there is no need for tuning.
What can you explore with Explorer?
One of the criticisms I had of Polestar and SAP’s Business Intelligence Accelerator was that they lacked applications or templates. Okay, so I can load a billion records, but what can I do with it?
While neither customer went into too much detail as to how the product is actually used, it’s not too hard to imagine businesspeople deploying the tool to instantly calculate customer profitability by product or region, compare forecasts to actual results, or argue for or against various SKU rationalization proposals based on data, not instinct.
In a meeting with SAP Business Objects’ CEO John Schwarz, I told him that I thought Explorer would make a great platform for third-party applications like Jonova’s business planning software. Imagine having the power and data needed to simulate the impact of moving to direct store delivery or to load point-of-sale (POS) and demand data from thousands of retail points and plan real-time replenishment strategies based on balancing costs and demand. If you can model it, you can make it happen. Of course, this would involve publishing the application programming interfaces. I’m not sure where that fits on the roadmap.
Clouds and SaaS
While none of the SAP executives talked specifically about a cloud version, I found an interesting set of PDF slides and a preview of “Explorer in the cloud” on the SAP Developer Network. The latter is available at https://create.ondemand.com/explorer
Mr. Apotheker’s keynote also featured one slide on SaaS. For large enterprises, SAP currently supports CRM, strategic sourcing, business intelligence, and carbon management. The latter comes from the acquisition of ClearStandards on the eve of SAPPHIRE. In the soon timeframe, SAP promised human capital management and expense management.
As you might imagine, we had a lot of questions. We were hoping to talk to SAP’s John Wookey during SAPPHIRE, but couldn’t get our schedules to mesh. Look for more next Monday.
SAP Business ByDesign: “Go on the offensive big time” in 2010
Jim Shepherd and I went to the exhibit floor to test-drive SAP Business ByDesign, SAP’s first entry into ERP as a service. The company has capped usage to 80 or so companies as it works on guaranteeing sub-second responses to transaction-intensive processes, improving the ease-of-use, adding more functionality, and figuring out how to make money in SaaS.
In my one-on-one meeting with Mr. Apotheker, he told me that if all goes well with the next release, SAP “will go on the offensive big time in 2010.” That should coincide with when he expects the economy to recovery.
He also said that SAP planned to sell Business ByDesign back into the customer base. The challenge has been the customers’ expectation that it will have all of the global functionality needed.
Two new topics for SAPPHIRE ’10?
In keeping with our tradition of offering unsolicited advice, here are two ideas for the next SAPPHIRE: the redesign or replacement of NetWeaver and a new holistic focus on marketing SAP services and support.
The idea that NetWeaver may need a refresh won’t create headlines. As one executive told me, “The time of the fridge is over.” The fridge is a reference to the refrigerator-like look of the NetWeaver product set. Over the next 12 months, SAP will likely embrace more third-party products such as Microsoft SharePoint, IBM WebSphere, and other application servers and integration products.
SAP will also need to get more aggressive on mobility. While I love my BlackBerry, it’s not the only smartphone. The company will also need to add a lot more capability around presence or location-based applications: Where are my people, and what’s the best way to reach them? Should I use IM, e-mail, phone, videoconferencing, or call the pro shop and ask them to find their golf cart?
While no application company seems to do a good job of selling and marketing their services and support offerings, the problem seems especially acute at SAP. One of Mr. Apotheker’s first moves when he assumes the sole CEO role on Tuesday should be to announce the search for a marketing executive responsible for all of SAP’s service and support offerings.
Maybe it’s me, but the service and support offerings seem to consist of pieces: Solution Manager, Value Engineering, Enterprise Support, MaxAttention, Run SAP, SDN, product documentation, consulting, implementation support, and the like. Someone needs to tie all of the offerings together in a clear, consistent package, and get customers to use them. We continue to be astonished by the large number of SAP customers that don’t use Solution Manager, Value Engineering, or SDN.
As if the job wasn’t daunting enough, the new person should also be responsible for making sure that the support tools are easy to use, and not be content that they are good enough.
Selling services and support will become increasing important as more of the lifecycle management burden falls on SAP. Many large customers will likely come to see SAP as their enterprise architect even in heterogeneous environments.
What do you think?
Will we see a battle royale emerge between SAP BusinessObjects Explorer and Oracle Exadata in the database appliance market? How do you rate SAP’s odds for success in SaaS? Is it serious about on demand? Can it displace best of breed? If you were redesigning the NetWeaver fridge, which features would you add or drop?
As always, I welcome your feedback and ideas— brichardson@amrresearch.com. Please visit my blog at http://blogs.amrresearch.com/enterprisesoftware.
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© Copyright 2009 by AMR Research, Inc.
Showing posts with label Business Objects. Show all posts
Showing posts with label Business Objects. Show all posts
Friday, May 15, 2009
Wednesday, September 10, 2008
One on One With the CEOs of Business Objects and Epicor | AMR Research
One on One With the CEOs of Business Objects and Epicor | AMR Research
One on One With the CEOs of Business Objects and Epicor
by Bruce Richardson
I recently spent a few days traversing the Golden State of California. While there, I met with the CEOs of Business Objects, E2open, Epicor, and Intellicorp as well as executives from four other interesting software and technology firms. Because of time and space limitations, our analysis will be distributed over the next few weeks.
During the meeting with Business Objects’ John Schwarz, my first question was: “What’s it like to be part of SAP?” My last question was a request for a sneak preview of his product plans for the next 12 months. You can read his answers and get all of our analysis at the First Thing Monday blog: Life With SAP: My Conversation With Business Object’s John Schwarz.
As for Epicor, this was my first meeting with Tom Kelly. He was named president and CEO of this midsize ERP vendor last February. Our meeting focused primarily on the impending release of Epicor 9. In my view, his company has done what Microsoft and Oracle once dreamed of: melding the best of their multiple offerings into a single, brand-new code base. For a closer look, we have the full story on our blog: Epicor 9: The Accomplishment That Eluded Microsoft and Oracle.
One on One With the CEOs of Business Objects and Epicor
by Bruce Richardson
I recently spent a few days traversing the Golden State of California. While there, I met with the CEOs of Business Objects, E2open, Epicor, and Intellicorp as well as executives from four other interesting software and technology firms. Because of time and space limitations, our analysis will be distributed over the next few weeks.
During the meeting with Business Objects’ John Schwarz, my first question was: “What’s it like to be part of SAP?” My last question was a request for a sneak preview of his product plans for the next 12 months. You can read his answers and get all of our analysis at the First Thing Monday blog: Life With SAP: My Conversation With Business Object’s John Schwarz.
As for Epicor, this was my first meeting with Tom Kelly. He was named president and CEO of this midsize ERP vendor last February. Our meeting focused primarily on the impending release of Epicor 9. In my view, his company has done what Microsoft and Oracle once dreamed of: melding the best of their multiple offerings into a single, brand-new code base. For a closer look, we have the full story on our blog: Epicor 9: The Accomplishment That Eluded Microsoft and Oracle.
Sunday, October 14, 2007
FT.com / Companies / IT - SAP allays fears of Oracle bid war
FT.com / Companies / IT - SAP allays fears of Oracle bid war
SAP allays fears of Oracle bid war
By Gerrit Wiesmannin Frankfurt
Published: October 14 2007 22:03 | Last updated: October 14 2007 22:03
SAP has sought to allay investor fears about a new bidding rivalry between the German business software maker and US rival Oracle by pledging big acquisitions only to enter new markets rather than to consolidate existing ones.
Henning Kagermann, chief executive, said the offers by SAP for software maker Business Objects and that of Oracle for BEA Systems – both valued at €4.8bn – showed the two groups were still on different paths.
“We bought a company that complements our product line in a fast-growing market in which SAP is not market leader,” he told the Financial Times.
“We believe in complementary deals. We’re not interested in a classic consolidating of markets.”
Investors last week dumped SAP stock for fear the largest business software maker in the world had given up its goal of growing organically to ape Oracle, which has spent $31bn (€21.8bn) on rivals in recent years. The German group’s stock price lost 5 per cent after it announced by far its biggest acquisition to gain a leading position in the market for business analysis programmes, an “end-user” area in which SAP is weak.
But investor fears of a bidding war with Oracle ebbed on Friday when the US group announced an unsolicited bid for BEA Systems, a move to consolidate its position among makers of software to bundle disparate applications. Mr Kagermann said SAP was well positioned in the market for so-called service oriented architecture.
He was not considering a counter offer for BEA, or a bid for any other company in a market that had “so much overlap” with SAP.
He said this was consistent with SAP’s strategy of growing organically in its two core units that provide the software spine or “platform” for corporations, and address the needs of small and medium-sized companies.
But he repeated adverse investor reaction would not stop SAP from committing to more deals in the end-user market. “We’re categorically not excluding further big acquisitions,” he said.
Business Objects specialises in programmes that sift corporate data to help executives decide strategy. Mr Kagermann noted “that many analysts believe that there are still interesting opportunities in this sector”.
Copyright The Financial Times Limited 2007
SAP allays fears of Oracle bid war
By Gerrit Wiesmannin Frankfurt
Published: October 14 2007 22:03 | Last updated: October 14 2007 22:03
SAP has sought to allay investor fears about a new bidding rivalry between the German business software maker and US rival Oracle by pledging big acquisitions only to enter new markets rather than to consolidate existing ones.
Henning Kagermann, chief executive, said the offers by SAP for software maker Business Objects and that of Oracle for BEA Systems – both valued at €4.8bn – showed the two groups were still on different paths.
“We bought a company that complements our product line in a fast-growing market in which SAP is not market leader,” he told the Financial Times.
“We believe in complementary deals. We’re not interested in a classic consolidating of markets.”
Investors last week dumped SAP stock for fear the largest business software maker in the world had given up its goal of growing organically to ape Oracle, which has spent $31bn (€21.8bn) on rivals in recent years. The German group’s stock price lost 5 per cent after it announced by far its biggest acquisition to gain a leading position in the market for business analysis programmes, an “end-user” area in which SAP is weak.
But investor fears of a bidding war with Oracle ebbed on Friday when the US group announced an unsolicited bid for BEA Systems, a move to consolidate its position among makers of software to bundle disparate applications. Mr Kagermann said SAP was well positioned in the market for so-called service oriented architecture.
He was not considering a counter offer for BEA, or a bid for any other company in a market that had “so much overlap” with SAP.
He said this was consistent with SAP’s strategy of growing organically in its two core units that provide the software spine or “platform” for corporations, and address the needs of small and medium-sized companies.
But he repeated adverse investor reaction would not stop SAP from committing to more deals in the end-user market. “We’re categorically not excluding further big acquisitions,” he said.
Business Objects specialises in programmes that sift corporate data to help executives decide strategy. Mr Kagermann noted “that many analysts believe that there are still interesting opportunities in this sector”.
Copyright The Financial Times Limited 2007
FT.com / Companies / US & Canada - SAP warns surprise tactics might resurface
FT.com / Companies / US & Canada - SAP warns surprise tactics might resurface
SAP warns surprise tactics might resurface
By Gerrit Wiesman
Published: October 14 2007 23:48 | Last updated: October 14 2007 23:48
Perhaps Henning Kagermann, the chief executive of German business software maker SAP, senses that catching investors off guard once could be construed as an accident, but that doing it twice could smack of carelessness.
In January, the world’s biggest maker of business software shocked the stock market when it announced that a new internet-based product for small companies would demand computer centres costing an unexpected €400m ($566m).
Last week, the company surprised again by appearing to give up on its strategy of growing organically when it bid €4.8bn ($6.7bn) for Business Objects, a Franco-US company specialising in corporate analysis software.
“Finding the right way to communicate is a challenge,” Mr Kagermann tells the FT.
“We don’t want to surprise the market too much. At the same time, we don’t want to be taken hostage so that we can’t react quickly anymore.”
Having watched SAP stock take a drubbing for the second time running after a big strategic announcement, he almost ruefully concedes: “We always try our best to master this challenge. But sometimes our efforts aren’t perfect.”
It is a delicate mea culpa that follows a week in which SAP shares closed at €39.51 in Frankfurt, 5 per cent below prices seen before the announcement last week of its agreed bid for Business Objects.
The punishment meted out by investors may have been a touch harsher in January, when shares fell almost 7 per cent. But the recent drop still stings.
“I didn’t expect to see such a big market reaction,” Mr Kagermann says.
But he is too self-assured and too convinced of his mission to do more penance than that.
As humbled as he may feel, his message throughout the rest of the interview is clear: “I don’t think we could have done it any other way.”
For one thing, he says stock market reactions in January and October were not comparable.
Investors knew SAP was working on a new so-called mid-market product, what surprised some was the cost of online availability.
“A year before [the announcement], I had flagged the fact that we no longer excluded on-demand solutions for [so-called] ERP [enterprise resource planning] applications,” he says – and it was only later that SAP could forecast the cost of the move.
Flagging a major acquisition would, to boot, have been counter-productive, he says.
“It wouldn’t have been very helpful to say, ‘We’re looking at acquisitions in this and this area’ because there weren’t that many targets around.”
Mr Kagermann stresses that investors are wrong to see an end to SAP’s organic-growth strategy: It will continue in the core areas of providing the software spine to big corporations, and addressing the needs of smaller companies.
“The business user segment is a different field,” he says. A fast-growing segment in which SAP was not market leader, it called for a different approach.
“We want to buy innovation,” he says, signalling an appetite for more.
At the same time, he says SAP is not embarking on an acquisitive strategy in this field akin to its American rival Oracle.
It has spent $31bn in the three years to buy rivals and consolidate the various markets it is in.
The top priority now is to integrate Business Objects. Mr Kagermann hopes this will be done by 2009.
“By then we should have been able to convince the market that this was the right decision,” he says.
But he cautions: “You can’t pass up opportunities just because you feel you need a quarter or half a year to prepare for them.”
Perhaps he fears that shocking shareholders a third time would appear deliberate. Now they have been warned.
Copyright The Financial Times Limited 2007
SAP warns surprise tactics might resurface
By Gerrit Wiesman
Published: October 14 2007 23:48 | Last updated: October 14 2007 23:48
Perhaps Henning Kagermann, the chief executive of German business software maker SAP, senses that catching investors off guard once could be construed as an accident, but that doing it twice could smack of carelessness.
In January, the world’s biggest maker of business software shocked the stock market when it announced that a new internet-based product for small companies would demand computer centres costing an unexpected €400m ($566m).
Last week, the company surprised again by appearing to give up on its strategy of growing organically when it bid €4.8bn ($6.7bn) for Business Objects, a Franco-US company specialising in corporate analysis software.
“Finding the right way to communicate is a challenge,” Mr Kagermann tells the FT.
“We don’t want to surprise the market too much. At the same time, we don’t want to be taken hostage so that we can’t react quickly anymore.”
Having watched SAP stock take a drubbing for the second time running after a big strategic announcement, he almost ruefully concedes: “We always try our best to master this challenge. But sometimes our efforts aren’t perfect.”
It is a delicate mea culpa that follows a week in which SAP shares closed at €39.51 in Frankfurt, 5 per cent below prices seen before the announcement last week of its agreed bid for Business Objects.
The punishment meted out by investors may have been a touch harsher in January, when shares fell almost 7 per cent. But the recent drop still stings.
“I didn’t expect to see such a big market reaction,” Mr Kagermann says.
But he is too self-assured and too convinced of his mission to do more penance than that.
As humbled as he may feel, his message throughout the rest of the interview is clear: “I don’t think we could have done it any other way.”
For one thing, he says stock market reactions in January and October were not comparable.
Investors knew SAP was working on a new so-called mid-market product, what surprised some was the cost of online availability.
“A year before [the announcement], I had flagged the fact that we no longer excluded on-demand solutions for [so-called] ERP [enterprise resource planning] applications,” he says – and it was only later that SAP could forecast the cost of the move.
Flagging a major acquisition would, to boot, have been counter-productive, he says.
“It wouldn’t have been very helpful to say, ‘We’re looking at acquisitions in this and this area’ because there weren’t that many targets around.”
Mr Kagermann stresses that investors are wrong to see an end to SAP’s organic-growth strategy: It will continue in the core areas of providing the software spine to big corporations, and addressing the needs of smaller companies.
“The business user segment is a different field,” he says. A fast-growing segment in which SAP was not market leader, it called for a different approach.
“We want to buy innovation,” he says, signalling an appetite for more.
At the same time, he says SAP is not embarking on an acquisitive strategy in this field akin to its American rival Oracle.
It has spent $31bn in the three years to buy rivals and consolidate the various markets it is in.
The top priority now is to integrate Business Objects. Mr Kagermann hopes this will be done by 2009.
“By then we should have been able to convince the market that this was the right decision,” he says.
But he cautions: “You can’t pass up opportunities just because you feel you need a quarter or half a year to prepare for them.”
Perhaps he fears that shocking shareholders a third time would appear deliberate. Now they have been warned.
Copyright The Financial Times Limited 2007
Friday, October 12, 2007
SAP Customers on Business Objects; salesforce.com’s VC Fund | AMR Research
SAP Customers on Business Objects; salesforce.com’s VC Fund | AMR Research
SAP Customers on Business Objects
by Bruce Richardson
By now, you know that SAP is buying Business Objects. (See “SAP Buys Business Objects” below in News of Note for more details.) When the deal is completed in 1Q08, SAP will have the broadest business intelligence / performance management (BI/PM) offering in the world. That’s both good news and bad news. If anything, SAP will have too many products.
I spent two days last week with 15 IT executives at an SAP event, and they all wanted to talk about the Business Objects deal. Ironically, the last time I saw most of these people was the week after Oracle announced that it was buying Hyperion for $3.3B. Many were Hyperion customers, too.
When I asked how many had Business Objects software in their companies, more than two-thirds of the executives raised their hand. I then asked whether they had Hyperion, and the same people raised their hand again. It will be interesting to see whether these executives can get their companies to adopt SAP-Business Objects as their standard or if they will continue to support a multivendor BI/PM world.
When Oracle bought Hyperion, several of the SAP customers I talked with were looking at big Hyperion upgrade bills. They were hoping that SAP would soon unveil plans for bolstering its business consolidation software. Six months later, they are still waiting for SAP to declare its plans for weaning them off of Hyperion.
SAP won’t be able to discuss its plans for Business Objects until the deal closes. The customers I talked with were concerned about which of the SAP and Business Objects products will survive. This is a bit unsettling for those that have already started down the Pilot Software or OutlookSoft path.
At the SAP event, several CIOs told me that their Business Objects reps were filling their BlackBerrys with invitations to seminars or requests to meet. I would expect the Business Objects reps to be very aggressive; I’m sure all good salespeople are racing to drain their pipelines before the deal closes.
What should SAP customers do for BI/PM? In next week’s First Thing Monday, we’ll look at areas SAP needs to address for this to work.
SAP Customers on Business Objects
by Bruce Richardson
By now, you know that SAP is buying Business Objects. (See “SAP Buys Business Objects” below in News of Note for more details.) When the deal is completed in 1Q08, SAP will have the broadest business intelligence / performance management (BI/PM) offering in the world. That’s both good news and bad news. If anything, SAP will have too many products.
I spent two days last week with 15 IT executives at an SAP event, and they all wanted to talk about the Business Objects deal. Ironically, the last time I saw most of these people was the week after Oracle announced that it was buying Hyperion for $3.3B. Many were Hyperion customers, too.
When I asked how many had Business Objects software in their companies, more than two-thirds of the executives raised their hand. I then asked whether they had Hyperion, and the same people raised their hand again. It will be interesting to see whether these executives can get their companies to adopt SAP-Business Objects as their standard or if they will continue to support a multivendor BI/PM world.
When Oracle bought Hyperion, several of the SAP customers I talked with were looking at big Hyperion upgrade bills. They were hoping that SAP would soon unveil plans for bolstering its business consolidation software. Six months later, they are still waiting for SAP to declare its plans for weaning them off of Hyperion.
SAP won’t be able to discuss its plans for Business Objects until the deal closes. The customers I talked with were concerned about which of the SAP and Business Objects products will survive. This is a bit unsettling for those that have already started down the Pilot Software or OutlookSoft path.
At the SAP event, several CIOs told me that their Business Objects reps were filling their BlackBerrys with invitations to seminars or requests to meet. I would expect the Business Objects reps to be very aggressive; I’m sure all good salespeople are racing to drain their pipelines before the deal closes.
What should SAP customers do for BI/PM? In next week’s First Thing Monday, we’ll look at areas SAP needs to address for this to work.
Wednesday, October 10, 2007
SAP's Planned Business Objects Buy Signals Strategic Shift
SAP's Planned Business Objects Buy Signals Strategic Shift
SAP's plan to buy Business Objects will put SAP into the lead for revenue from business intelligence platform products. However, many integration and execution challenges lie ahead.
SAP's plan to buy Business Objects will put SAP into the lead for revenue from business intelligence platform products. However, many integration and execution challenges lie ahead.
Monday, October 08, 2007
Übernahme von Business Objects SAP befeuert Software-Krieg - Wirtschaft - sueddeutsche.de
Übernahme von Business Objects SAP befeuert Software-Krieg - Wirtschaft - sueddeutsche.de
Im Duell mit Konkurrent Oracle rüstet SAP auf: Der deutsche Softwarekonzern stemmt für knapp fünf Milliarden Euro die teuerste Übernahme seiner Geschichte.
Im Duell mit Konkurrent Oracle rüstet SAP auf: Der deutsche Softwarekonzern stemmt für knapp fünf Milliarden Euro die teuerste Übernahme seiner Geschichte.
FT.com / Companies / Europe - A new mantra to explain SAP purchase
FT.com / Companies / Europe - A new mantra to explain SAP purchase
A new mantra to explain SAP purchase
By Gerrit Wiesmann
Published: October 8 2007 20:20 | Last updated: October 8 2007 20:20
Having spent years stressing organic growth over the acquisitive strategy of arch-rival Oracle, the departure of German business-software maker SAP from its big corporate mantra proved surprisingly matter-of-fact.
But, as so often with Henning Kagermann, chief executive of the world’s largest maker of business software, it was not so much that he was changing tack – the world was at last beginning to understand things he said all along.
The €4.8bn ($6.7bn) agreed takeover offer for Franco-American software group Business Objects was entirely consistent with SAP’s goals to grow in three sectors, Mr Kagermann said in Frankfurt.
Organic growth was – and would remain – the mantra for the two areas that had been the focus of attention for the past four years: revamping the software backbone that all companies need, and luring smaller businesses.
In both areas, buying other companies made no sense because SAP was a clear market leader and so confident about its technological leadership that it saw no need for any outside help, SAP’s chief executive explained.
But, apparently forgotten by everyone, except Mr Kagermann, was SAP’s third ambition: to diversify from supplying software backbones, so-called business-process platforms, to selling programmes for end-users. And this, Mr Kagermann implied, had always been a very different proposition. So-called “business user solutions are very different”, he said, noting that this market is growing and consolidating extremely quickly.
“We have some innovation and know-how [in this field], but we have to accept that there are other [market] leaders,” he said, noting a slew of smallish companies that had long focused on addressing specialised user needs.
“People expect us to embrace the latest and coolest technology,” Mr Kagermann said. That’s why SAP decided it would be better quickly to buy in potential big sellers rather than start time-consuming development.
One of these is compiling and sifting through corporate data to improve performance. According to SAP, Business Objects is the clearleader in this market with annual sales of €10bn and yearly growth of 10 per cent.
Mr Kagermann said adverse reaction by investors – SAP stock fell 4 per cent to €39.95 – had more to do with the fact that “the market is not educated” than with any inconsistency at SAP. It would in time come around.
SAP had in past years already bought software makers Virsa and OutlookSoft to offer its customers, respectively, integrated programmes to check legal compliance and assess corporate performance. But in spending $200m on OutlookSoft, for example, SAP long made these moves look part of a pocket-money financed sideshow that would not lay claim to corporate resources to any noticeable extent.
Having announced a deal 34 times bigger than the OulookSoft move this spring, Mr Kagermann strongly hinted that the time of trifling “fill-in acquisitions” had ended, presaging fill-in purchases easily above the billion mark.
SAP had proven it could grow organically and that it could innovate. “Now we are on our way to proving that we can make larger acquisitions,” he said, declining to name what fields are next.
“There are other areas in which such a move would make sense,” Mr Kagermann said, noting that ever more companies wanted integrated software “But [the acquisition of Business Objects] is by far the most important.”
Copyright The Financial Times Limited 2007
A new mantra to explain SAP purchase
By Gerrit Wiesmann
Published: October 8 2007 20:20 | Last updated: October 8 2007 20:20
Having spent years stressing organic growth over the acquisitive strategy of arch-rival Oracle, the departure of German business-software maker SAP from its big corporate mantra proved surprisingly matter-of-fact.
But, as so often with Henning Kagermann, chief executive of the world’s largest maker of business software, it was not so much that he was changing tack – the world was at last beginning to understand things he said all along.
The €4.8bn ($6.7bn) agreed takeover offer for Franco-American software group Business Objects was entirely consistent with SAP’s goals to grow in three sectors, Mr Kagermann said in Frankfurt.
Organic growth was – and would remain – the mantra for the two areas that had been the focus of attention for the past four years: revamping the software backbone that all companies need, and luring smaller businesses.
In both areas, buying other companies made no sense because SAP was a clear market leader and so confident about its technological leadership that it saw no need for any outside help, SAP’s chief executive explained.
But, apparently forgotten by everyone, except Mr Kagermann, was SAP’s third ambition: to diversify from supplying software backbones, so-called business-process platforms, to selling programmes for end-users. And this, Mr Kagermann implied, had always been a very different proposition. So-called “business user solutions are very different”, he said, noting that this market is growing and consolidating extremely quickly.
“We have some innovation and know-how [in this field], but we have to accept that there are other [market] leaders,” he said, noting a slew of smallish companies that had long focused on addressing specialised user needs.
“People expect us to embrace the latest and coolest technology,” Mr Kagermann said. That’s why SAP decided it would be better quickly to buy in potential big sellers rather than start time-consuming development.
One of these is compiling and sifting through corporate data to improve performance. According to SAP, Business Objects is the clearleader in this market with annual sales of €10bn and yearly growth of 10 per cent.
Mr Kagermann said adverse reaction by investors – SAP stock fell 4 per cent to €39.95 – had more to do with the fact that “the market is not educated” than with any inconsistency at SAP. It would in time come around.
SAP had in past years already bought software makers Virsa and OutlookSoft to offer its customers, respectively, integrated programmes to check legal compliance and assess corporate performance. But in spending $200m on OutlookSoft, for example, SAP long made these moves look part of a pocket-money financed sideshow that would not lay claim to corporate resources to any noticeable extent.
Having announced a deal 34 times bigger than the OulookSoft move this spring, Mr Kagermann strongly hinted that the time of trifling “fill-in acquisitions” had ended, presaging fill-in purchases easily above the billion mark.
SAP had proven it could grow organically and that it could innovate. “Now we are on our way to proving that we can make larger acquisitions,” he said, declining to name what fields are next.
“There are other areas in which such a move would make sense,” Mr Kagermann said, noting that ever more companies wanted integrated software “But [the acquisition of Business Objects] is by far the most important.”
Copyright The Financial Times Limited 2007
FT.com / Companies / Europe - SAP signals hunger for deals
FT.com / Companies / Europe - SAP signals hunger for deals
SAP signals hunger for deals
By Gerrit Wiesmann in Frankfurt and Pan Kwan Yuk in Paris
Published: October 8 2007 20:20 | Last updated: October 8 2007 20:20
Germany’s SAP, the world’s largest maker of business software, Monday signalled it could look at further acquisitions even as its departure from an avowed strategy of organic growth sent investors running for cover.
Outlining an agreed takeover offer worth €4.8bn ($6.7bn) for Franco-American software house Business Objects, SAP chief executive Henning Kagermann said SAP was on its “way to proving we can make larger acquisitions”.
The company’s announcement late Sunday that it was buying the market leader in programmes to collect and sift corporate data knocked 4 per cent of SAP stock in trading Monday.
The shares closed at €39.95 in Frankfurt.
Investors were rattled because Mr Kagermann had for years underlined SAP’s superiority to US rival Oracle by pointing out the German company was focused on organic growth – not dealmaking.
To catch SAP, Oracle has spent billions on buying rival makers of central business programmes as well as end-user suppliers such as Hyperion, a Business Objects rival, it bought for $3.3bn (€2.3bn) this spring.
But at a press conference in Frankfurt, Mr Kagermann said the largest acquisition in SAP’s history was not a reaction to Oracle.
“We have not seen … that Oracle is gaining market share,” he stressed.
He said the move was consistent with SAP’s strategy outlined as far back as 2003. Having “done our homework” in its two core sectors, which would still grow organically, SAP now had time to look at end-users’ needs.
As demand for traditional manufacturing and supply-chain management slows, SAP said that sales of business analysis software were growing at around 10 per cent per year from current annual sales of about €10bn.
In buying Business Objects, SAP would be able to offer its clients more integrated features, Mr Kagermann said, stressing that demand for such end-user features would likely continue to rise over the next years.
“There are other areas in which such a move would make sense,” Mr Kagermann said, noting that ever more companies wanted integrated software. “But [the acquisition of Business Objects] is by far the most important.”
SAP has spent the past years reinventing its so-called business process platform, the nervous systems of companies’ IT systems, and making a foray into the market for mid-sized companies, which critics argue came late.
Copyright The Financial Times Limited 2007
SAP signals hunger for deals
By Gerrit Wiesmann in Frankfurt and Pan Kwan Yuk in Paris
Published: October 8 2007 20:20 | Last updated: October 8 2007 20:20
Germany’s SAP, the world’s largest maker of business software, Monday signalled it could look at further acquisitions even as its departure from an avowed strategy of organic growth sent investors running for cover.
Outlining an agreed takeover offer worth €4.8bn ($6.7bn) for Franco-American software house Business Objects, SAP chief executive Henning Kagermann said SAP was on its “way to proving we can make larger acquisitions”.
The company’s announcement late Sunday that it was buying the market leader in programmes to collect and sift corporate data knocked 4 per cent of SAP stock in trading Monday.
The shares closed at €39.95 in Frankfurt.
Investors were rattled because Mr Kagermann had for years underlined SAP’s superiority to US rival Oracle by pointing out the German company was focused on organic growth – not dealmaking.
To catch SAP, Oracle has spent billions on buying rival makers of central business programmes as well as end-user suppliers such as Hyperion, a Business Objects rival, it bought for $3.3bn (€2.3bn) this spring.
But at a press conference in Frankfurt, Mr Kagermann said the largest acquisition in SAP’s history was not a reaction to Oracle.
“We have not seen … that Oracle is gaining market share,” he stressed.
He said the move was consistent with SAP’s strategy outlined as far back as 2003. Having “done our homework” in its two core sectors, which would still grow organically, SAP now had time to look at end-users’ needs.
As demand for traditional manufacturing and supply-chain management slows, SAP said that sales of business analysis software were growing at around 10 per cent per year from current annual sales of about €10bn.
In buying Business Objects, SAP would be able to offer its clients more integrated features, Mr Kagermann said, stressing that demand for such end-user features would likely continue to rise over the next years.
“There are other areas in which such a move would make sense,” Mr Kagermann said, noting that ever more companies wanted integrated software. “But [the acquisition of Business Objects] is by far the most important.”
SAP has spent the past years reinventing its so-called business process platform, the nervous systems of companies’ IT systems, and making a foray into the market for mid-sized companies, which critics argue came late.
Copyright The Financial Times Limited 2007
FT.com / Companies / IT - SAP buys Business Objects for €4.8bn
FT.com / Companies / IT - SAP buys Business Objects for €4.8bn
SAP buys Business Objects for €4.8bn
By Gerrit Wiesmann in Frankfurt and Lina Saigol in London
Published: October 7 2007 21:55 | Last updated: October 8 2007 00:07
Germany’s SAP on Sunday night launched a €4.8bn (£3.3bn) bid for Franco-American software maker Business Objects in what seems a departure from its long-term strategy to expand only organically and by smaller purchases.
The world’s largest maker of business software said it would offer €42 a share for the company, which specialises in business-analysis packages; a 20 per cent premium to Friday’s closing price in Paris.
The decision was seen as a response by SAP to a purchase by Oracle, its US archrival, which in March bought Hyperion, a smaller rival of Business Objects, for $3.3bn (£1.6bn).
SAP denied its agreed bid was a change of tack. Henning Kagermann, chief executive, said the company had bought interesting applications with “end-user appeal” before. SAP would continue to expand its core business organically.
In a conference call, he said that was consistent with SAP’s 2003 strategy statement. After changes to the main software platform, SAP was looking at individual applications.
Mr Kagermann said this opportunity to combine “market leaders in their respective domains” was “an opportunity unparalleled” in the German group’s history. He declined to give details of new products.
SAP said the move, financed by cash and debt, would go through if supported by 50.01 per cent of Business Objects’ shareholders. It hopes to close the transaction in the first quarter of next year.
The deal would mildly dilute earnings in the coming year, but boost profits in 2009 and beyond. “Financially and not just strategically, this is a good deal,” Mr Kagermann said.
It comes at a sensitive time for the German software maker. It is spending €400m to introduce software for small businesses, which will, for the first time, be hosted on the web by its own computer centres.
Copyright The Financial Times Limited 2007
SAP buys Business Objects for €4.8bn
By Gerrit Wiesmann in Frankfurt and Lina Saigol in London
Published: October 7 2007 21:55 | Last updated: October 8 2007 00:07
Germany’s SAP on Sunday night launched a €4.8bn (£3.3bn) bid for Franco-American software maker Business Objects in what seems a departure from its long-term strategy to expand only organically and by smaller purchases.
The world’s largest maker of business software said it would offer €42 a share for the company, which specialises in business-analysis packages; a 20 per cent premium to Friday’s closing price in Paris.
The decision was seen as a response by SAP to a purchase by Oracle, its US archrival, which in March bought Hyperion, a smaller rival of Business Objects, for $3.3bn (£1.6bn).
SAP denied its agreed bid was a change of tack. Henning Kagermann, chief executive, said the company had bought interesting applications with “end-user appeal” before. SAP would continue to expand its core business organically.
In a conference call, he said that was consistent with SAP’s 2003 strategy statement. After changes to the main software platform, SAP was looking at individual applications.
Mr Kagermann said this opportunity to combine “market leaders in their respective domains” was “an opportunity unparalleled” in the German group’s history. He declined to give details of new products.
SAP said the move, financed by cash and debt, would go through if supported by 50.01 per cent of Business Objects’ shareholders. It hopes to close the transaction in the first quarter of next year.
The deal would mildly dilute earnings in the coming year, but boost profits in 2009 and beyond. “Financially and not just strategically, this is a good deal,” Mr Kagermann said.
It comes at a sensitive time for the German software maker. It is spending €400m to introduce software for small businesses, which will, for the first time, be hosted on the web by its own computer centres.
Copyright The Financial Times Limited 2007
Sunday, October 07, 2007
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