SAP-Business Objects Deal Threatens IBM Relationship
SAP's buyout of Business Objects could shake up some long-standing relationships with IBM.With SAPs acquisition of Business Objects set to close this quarter, the deal leaves a rarely-asked question regarding Business Objects long-standing relationship with IBM: What impact will the SAP buyout have on Business Objects relationship with IBM? IBMs relationship with Business Objects spans more than a decade and has deepened over the past couple of years as IBM has taken a keen interest in two separate but intertwining areas: business intelligence and business applications.
To read more about why SAPs buyout of Business Objects is shaking up the Business Intelligence market, click here. Saugatuck analysts Bruce Guptill and Mike West contend in an October 2007 research note that "SaaS is the primary means through which BIand eventually CPM [corporate performance management] will deliver enterprise-wide value the combination of Business Objects SaaS initiatives and SAPs recently announced SMB-targeted Business ByDesign on-demand ERP could prove to be a very strong one-two punch." While a consensus of analysts believe that IBM is a mature enough vendor to successfully partner and compete with other vendors, AMRs John Hagerty points to the IBMs ongoing relationship with SAP, despite the fact that IBMs WebSphere platform competes with SAPs NetWeaver platform. Its clear that SAP, IBM, Microsoft and Oracle (with its acquisition of Hyperion last year) will compete heavily for the same BI customerinitially the worlds CFOs. And since BI has been ranked by a number of analyst firms as a top spending priority in 2008, the competition will be fierce. "With IBM, because of who they are and what they do [think-services] they can maintain relationships with partners and competitors," said Hagerty. "IBM is set to acquire Cognos and they will own [BI] assets, but they will partner with [Cognos] biggest competitor, Business Objects. Thats pretty standard for IBM. In the short term there will be no impact. But it remains to be seen longer term whether [IBM] leans toward their own [BI software] or not." As Gartner points out in its report "IBM Offers to Buy Cognos: The Market Impact," last year saw the pendulum shift from market dominance by BI pure-play vendors towards large stack vendors, referring to the pair-ups of Oracle and Hyperion, SAP and Business Objects and IBM and Cognos. While IBM hasnt outlined its product strategy with Cognos quite yetCognos shareholders vote on the deal Jan. 14Cognos will add its BI Platform and CPM [corporate performance management] software on top of IBMs Information Integration and DataWarehousing products, according to the Gartner report. "IBM is no longer the stack vendor missing in action in BI Platforms and CPM," wrote Gartner analyst Dan Sommer. "Big Blue will for the first time be a serious challenger to Oracle, Microsoft and SAP."
Read more here about IBM acquisition of Cognos. After IBM announced its intended acquisition of Cognos in October 2007 Gordon Breese, vice-president of global alliances at Business Objects released a statement underscoring that the relationship with IBM will continue. "Business Objects has always had co-opetition relationships with the major infrastructure players," said Breese. "We have competed with IBM in some areas, and closely partnered in other areas. The same holds true for our relationships with Microsoft and Oracle. As with all these complicated relationships, the customer ultimately determines the outcome," Breese said. Check out eWEEK.coms for the latest news in desktop and notebook computing.