SAP and IBM have declared their intention to run Business Objects and Cognos as independent units and to maintain their technology independence. Nevertheless, there has to be some degree of software integration between the different product sets, only if to increase cross-sell opportunities with existing customers. As far as product integration goes, Oracle/Hyperion and SAP/Business Objects have a lot to do with overlapping products, although Oracle, having acquired Hyperion earlier in the year, has had a head start. Oracle is also by now an old-hand at acquiring companies and integrating solutions. That experience is likely to help it with Hyperion, albeit with increased product complexity. SAP, on the other hand, is new to big acquisitions and will have more to prove. IBM and Cognos do not have a great deal of overlap but there is some; for example, in the area of data integration, IBM has technology from its purchase of Ascential, and Cognos has technology from Composite Software embedded in its BI.
Then there is the sticky question of partners – with their acquisitions, IBM and SAP are going head-to-head with each other on BI, even though they have been partners. IBM also partners with Business Objects and other BI vendors, who are also partners with SAP. Furthermore, there is an array of channel and independent software vendors (ISVs) who have strategically aligned themselves with one or the other. These provide sales channels and deployment services at customer sites. Many of these relationships will now be subject to review and repositioning.
In the meantime, many customer CIO’s will be thinking about the future of their BI investment, wanting to know if the leading edge product that they have deployed will remain so, or if it will stagnate and be overtaken by rival products? That will all depend on how the product integration is carried out. The consolidated vendors’ focus of attention will no doubt be on integration, which will take resources away from innovation and product advancement, but the time spent on that can be made as short as possible if the work is carried out well.
The uncertainty and the big vendors’ focus on product integration together make one great sales opportunity for the remaining independent BI vendors, large and small (e.g. SAS, Information Builders, Microstrategy, Actuate, and QlikTech). They are the ones that are likely to deliver innovation, coming up with new and winning product functionality. There is also a great opportunity for these vendors to forge new partnerships. Furthermore, the situation gives Microsoft a big break to push its new but already integrated PerformancePoint solution. The software giant is also likely to boost its vast partner network.
Integration typically takes many months, in the order of 14 months or longer, and vendors are expected to provide maintenance and support for their products for a reasonable period of time after the acquisitions are completed. As for partnership issues, realignment is not likely to take long, as neither vendors or channel partners/ISVs would want to lose any sales opportunities.
A certainty in this unsettled market is that customers do not like uncertainty and volatility. It is expected that a number of them will review their strategic plans for BI. Some of them may even re-prioritize their IT investment plans to allow the BI market to settle.
Source: OpinionWire by Butler Group (www.butlergroup.com)
