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SAP and Business Objects take the next step

The SAP and Business Objects merger is one step closer to completion, and the companies are announcing new business intelligence products.

With SAP set to finalize its purchase of business intelligence (BI) stalwart Business Objects, the two companies...

Wednesday moved forward with nine new jointly created product offerings.

The software includes products focused on financial performance management and governance, risk and compliance, as well as packages aimed at small and medium-sized businesses, such as Business Objects Edge Series. Another new offering, Master Data Services, is based on the SAP and Business Objects business intelligence platforms. The new packages will be available later this month and sold by both SAP and Business Objects' sales teams, SAP officials said.

"The combined portfolio definitely enhances SAP's position in business performance solutions," said Paul Hamerman, vice president of business process and applications at Cambridge, Mass.-based Forrester Research Inc. "While the specific product roadmaps have not yet been disclosed, my research indicates that [SAP and Business Objects] will be able to provide first-rate solutions in planning and budgeting, financial consolidations, strategy and measurement, and cost and profitability."

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Some of the new products -- specifically those related to BI, including Enterprise Query, Reporting and Analysis, and Visualization and Reporting -- are just a repackaging of existing Business Objects products, according to Boris Evelson, a principal analyst with Forrester. SAP, he added, will keep NetWeaver BI as its base BI offering and provide Business Objects technology at a premium to existing customers.

"The real story will come out in a few months when the converged product map is finalized and becomes public, and we have actual confirmation that SAP and Business Objects sales forces are cooperating, not competing," Evelson said.

SAP's announcement came on the day Oracle confirmed that it will acquire BEA in a deal that appeared dead a few months ago. It also falls in the middle of SAP's quiet period, following its fourth-quarter earnings report.

SAP's deputy CEO, Léo Apotheker, citing IDC research, claimed that the combined companies are the leader in the BI/business user space with $2.5 billion in revenue, ahead of Oracle-Hyperion and SAS, which generate about $1.5 billion and $1.1 billion in annual BI and business user revenues, respectively. Together, he said, SAP and Business Objects count approximately 60,000 unique customers.

With 87% of Business Objects shareholders now onboard, SAP plans to operate Business Objects "mostly independently," according to CEO Henning Kagermann. Business Objects CEO John Schwarz will join the executive board of SAP and lead the group that includes SAP's Business User unit and Business Objects. Business Objects will continue to lead sales in non-SAP accounts, Evelson said.

Schwarz confirmed that while the company will align with SAP's technology and organization to reach SAP customers, it is committed to an open platform.

"We are equally committed to the non-SAP customer, non-SAP platforms, non-SAP environments," Schwarz said. "So we can continue to support those customers that have invested with us. And in fact our intention is to have a BI solution on top of Oracle that is better than Oracle's own BI solution."

A platform that can work with any other technology -- whether it's an Oracle ERP product or something Accenture or Wipro custom built -- is a critical part of SAP's strategy going forward, according to Ray Wang, a principal analyst at Forrester. He pointed to the potential to take advantage of this agnostic BI platform and leverage SAP's business process expertise to solve problems in any environment as one potential benefit. This should serve to ease the minds of SAP and Business Objects customers alike, he added.

"So all in all, [it's a] win-win situation for SAP customers, who will have options to migrate up to more complex, more heterogeneous Business Objects products," Evelson said. "[It's a] non-event so far for Business Objects customers; SAP is not meddling in their affairs yet."

Customers should keep a close eye on the situation, however, because the companies have some similar offerings that could be consolidated, according to Hamerman.

"There will likely be some fallout in terms of overlapping solutions that don't make the cut," he cautioned. "Customers should look closely at the product roadmaps as they emerge to assess their long-term strategies."

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