The heat is on: SAP’s purchase of Business Objects is a defensive move

SAP’s plan to acquire Business Objects is an indication that the German software giant is feeling pressure from Oracle, its chief rival in the enterprise software space.<br/>


SAP ’s plan to acquire Business Objects is an indication that the German software giant is feeling pressure from Oracle , its chief rival in the enterprise software space.
As Oracle went about gobbling up large software companies like PeopleSoft and Siebel the past few years, SAP limited its acquisitions to small “strategic” purchases. The SAP management team insisted any major additions to its product portfolio would be developed in-house.
But early this week SAP pledged to spend $6.8 billion for business intelligence (BI) software specialist Business Objects. That’s more than twice the $3.3 billion that Oracle paid for Hyperion—another BI supplier—barely six months ago.
In a conference call announcing the Business Objects deal, SAP CEO Hennig Kagermann said the company isn’t abandoning its organic growth strategy; it’s merely making an exception in a market segment that demands flexibility from its technology suppliers. The BI sector is “more like a consumer market in that customers expect you to embrace the latest and coolest technology," Kagermann said. "For this, we decided to go with an acquisition strategy.”
To a large extent, SAP already was giving BI users want they wanted by forging alliances that give various BI vendors easy access to data contained in SAP applications. When Oracle purchased Hyperion, however, users suddenly could look to a single supplier for both a full set of enterprise applications and business intelligence tools. SAP could no longer stand pat—particularly in light of how things have transpired since Oracle outbid SAP for Retek, a retail software supplier, in 2005. Since closing that deal, Oracle has made significant inroads
The question now is, what does SAP’s proposed acquisition of Business Objects mean for the BI software market? Executives with Teradata , a BI specialist and SAP business partner, found themselves confronting that question repeatedly at the company’s annual user conference, which opened in Las Vegas the day after the SAP-Business Objects deal was announced.
Terdata’s expertise is in centralized data warehouses that can serve as foundations for enterprisewide business reporting and analysis programs.
“The statement from SAP says Business Objects will operate as a stand-alone company,” Teradata CEO Michael Koehler said. “It shouldn’t have any impact on us.”
Bob Fair, Teradata’s executive VP, global field operations, said previous acquisitions of BI companies by IBM and Oracle had strengthened Teradata’s partnerships with those organizations, and he sees no reason to think things will be different with SAP and Business Objects.
“These large technology vendors are looking to expand software portfolios as means of growing their business,” Fair said. “But they are not looking to do away with their partner ecosystems, which also do a lot to contribute to their growth.”
Tim Shaw is a Teradata program director who works closely with manufacturing companies that link Teradata’s data warehousing and analysis tools to SAP applications. In an interview with MBT, he said SAP recently added components to its NetWeaver technology stack that make it easier for independent BI vendors to access native SAP data. He also argued that it would be impractical—if not impossible—for SAP to reverse that trend given the manner in which most companies deploy BI technology.
Noting that companies historically have deployed BI in somewhat ad hoc fashion—department by department or division by division—Shaw said, “They typically have BI tools from a number of vendors. And they generally are looking for ways of linking all those tools rather than eliminating them.”

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me