Business Objects’ intended acquisition of Cartesis…is a clear admission that it has changed its mind about being a ‘pure play reporting’ company and now intends to play catch-up in the performance management space, said Walter.
Business Objects announced the day before yesterday its intention to acquire Cartesis, a provider of financial reporting, governance, risk, and compliance software applications.
Business Objects CEO John Schwarz described Cartesis as the crowning component in its performance management portfolio since it first moved into the market with its $100m acquisition of SRC Software in July 2005, and consolidated its position with the $56m purchase of costing software specialist Armstrong Laing Software in September 2006.
But perhaps as you would expect, Business Objects rival SAS claimed to be equally unperturbed by the news. The deal is, not a very surprising occurrence, said Richard Kellett, head of technology strategy at SAS UK. We at SAS have been expecting a large amount of acquisition activity in the performance management market, with the bigger vendors needing to gobble up smaller, niche players to improve their offerings. SAS has proven performance management solutions and a mature platform with enterprise offerings meeting the needs of not only finance but also business units outside of finance.
Paris, France-based Cartesis is profitable and has trailing revenue of 100m euros ($136m), a 1,300-strong customer base, and announced a 29% increase in license revenue in its latest quarter. The deal is expected to be neutral to Business Objects’ earnings this financial year and accretive next year.
In a market much more threatening since Oracle’s $3.3bn acquisition of Hyperion, Business Objects claims that Cartesis will enable it to offer the market’s broadest offering to the office of the CFO, or CFO.
About 400 of Cartesis’ 600-strong workforce come from an accountancy or financial background, while Business Objects said its platform would be broadened to address US and international standards for financial reporting and consolidation, as well as governance, risk, and compliance management.
But Cognos’ Walter was damning of the deal. He said: Cognos sees Business Objects’ agreement to acquire Cartesis as further acknowledgement that the vision Cognos laid out for customers six years ago – of integrated performance management comprised of BI, planning, consolidation, and score-carding – is the vision that customers want.
Customers of both Cartesis and Business Objects need to consider that this acquisition brings complete technology overlap, claimed Walter. A Noah’s Arc of technology to be integrated includes: three consolidation engines, three planning engines, and multiple reporting and analysis engines.
Business Objects must now embark on the long process of rationalizing substantial product overlap, technology and business model differences and integrating Cartesis with its core technology, added Walter. Its sales force will need to deal with the distraction and disruption of the integration to come – ironing out account, product and technology architecture issues over the next few quarters (or longer).
Meanwhile, SAS, another rival in the business intelligence space, pointed to the potential uncertainty that Business Objects or Cartesis customers could now face. The main priority in this recent acquisition, like with many others, is the customers, who are certain to see an unstable time ahead of them, said SAS’s Kellett.
