SAP Seals Business Objects Deal

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Oracle Announcement Fuels the Rivalry

Of course, rivals aren't standing still. That was driven home on Jan. 16, when SAP rival Oracle (ORCL) announced plans to acquire middleware software company BEA Systems (BEAS) for $8.5 billion—on the very day SAP had picked to showcase the completion of the Business Objects acquisition. Analysts say the Oracle-BEA deal won't have much impact on SAP. Oracle CEO Larry Ellison "is buying BEA for its installed base and its vertical expertise, and SAP does not need that," says Bruce Richardson, chief research officer at AMR Research.

Apotheker wouldn't comment on Oracle's Jan. 16 announcement, other than to allude to its unfortunate timing and note that the bid for BEA "was not news, other than the fact that [Oracle is] going to pay a lot more money" than the $6.7 billion it originally offered last October (BusinessWeek.com, 10/12/07).

A "Dashboard" View

SAP itself has come under criticism for how much it spent on Business Objects. Some analysts say they believe a rival firm called Hyperion Solutions, which was snapped up by Oracle in March, 2007, for $3.3 billion (BusinessWeek.com, 3/2/07), would have been a better fit with SAP than Business Objects. Apotheker dismisses such talk, arguing that SAP had the chance to buy Hyperion but passed it up.

So what will SAP do with Business Objects now that the deal is done? The company said on Jan. 16 that by adding business intelligence to its existing suite of business management tools, SAP will be able to give executives a "dashboard" view into their business processes. Business intelligence, which adds sophisticated number-crunching and analysis to the mix, will let managers make more informed decisions and spot previously invisible patterns in data.

Business Objects will be operated as a standalone unit within SAP. To oversee the integration, SAP says it will name Business Objects CEO John Schwarz to the SAP executive board. And at the annual SAP shareholders meeting in May, Business Objects founder and Chairman Bernard Liautaud is expected to be elected to the SAP supervisory board.

AMR Research's Richardson predicts the addition of Business Objects products will present "lots and lots of new selling opportunities for SAP."

Schenker is a BusinessWeek correspondent in Paris.