Correction at 10:07 a.m. PST on February 27: An earlier version of this report cited a source's claim that SAP added a change-of-control policy, aka a golden parachute for executives. An SAP representative said there is no such policy.
Microsoft investors, don't hold your breath that Redmond is about to dump its pursuit of hottie Yahoo and change its flirtatious stance with SAP into something more serious.
Sure, Microsoft and SAP have discussed a potential merger executive to executive for a number of years, but it's never risen beyond that level to be fully vetted by SAP's supervisory board, which would ultimately need to give its blessing for such a deal to get done, said one SAP insider.
"There's been small talk and we have walked around and flirted a bit, but it's never been a serious look," said the source.
And now, with various reports coming out that Microsoft should dump the Yahoo buyout bid, in favor of another deal, such as an SAP merger as one report noted in The New York Times, this source noted that Microsoft lost its chance to acquire SAP at a deep discount several years ago when it was cheap, cheap, cheap.
"Hasso (Plattner, co-founder) and the board have said if Microsoft wanted to buy us, they should have made an offer three or four years ago when we were so cheap," noted the source.
Indeed. SAP's stock currently trades around $28 a share, compared with roughly a third of that level back in 2003.
... Read moreSAP on Tuesday sent out a notice to employees that the deck chairs will be realigned following its megamerger with Business Objects, according to sources close to the company.
SAP's business user organization, which is responsible for information worker and organizational performance applications, will be moved over to Business Objects, the sources said.
In some ways, that should come as no surprise.
SAP, as part of its $6.8 billion Business Objects merger announcement in October, said Doug Merritt, the head of its Business User Development and a corporate officer, would join the Business Objects group and report to Business Objects Chief Executive John Schwarz, rather than Henning Kagermann, SAP's chief executive.
Post-merger, Business Objects will continue to operate as a standalone business under the SAP Group.
SAP's business user organization, according to its presentation to financial analysts in Vienna last year, includes Duet, enterprise search, mobile, Adobe Systems forms, and analytics dashboard, as well as governance, risk, and compliance software and corporate performance management software.
Kagermann and Business Objects executives plan to chew the fat with the press on this topic in greater detail Wednesday.
UPDATE: January 16, 2008, 1:30 pm (PT)And chew they did. Kagermann, along with Leo Apotheker, SAP deputy CEO, and Business Object's Schwarz, offered up their vision and road map of the combined company. SAP on Tuesday closed its merger with Business Objects.
SAP and Business Objects plan to jointly introduce nine products by the end of this month, of which two will specifically be targeted at mid-size to small companies. Those two products include its SAP Business All-in-One with BusinessObjects Edge Standard package, which focuses on delivering a business process platform with comprehensive business intelligence, and also the Crystal Reports Server Package, which is a type of reporting technology.
The other seven products include: a financial performance management package geared toward chief financial officers, a.k.a. head bean counters; a governance, risk and compliance package for tackling regulatory issues; a visualization and reporting package; enterprise query, reporting and analysis package; data integration and data quality management package; and, finally, a master data services package.
With Business Objects, a pioneer in the business intelligence arena, SAP is looking to build its fourth pillar in its four-pillar growth strategy, said Kagermann. SAP has viewed business intelligence as key to their strategy of maintaining a high growth rate, given the recent rapid acceleration SAP has seen in that market.
This blog initially misstated what day SAP announced it would acquire Business Objects. It is Sunday.
If you're an enterprise looking for a choice of vendors, your choices just got constrained even further. Oracle has been the primary consolidating force in the industry, but SAP apparently wants to get in the consolidation game, as well. Sunday it announced the acquisition of Business Objects for $6.8 billion.
As Jason Maynard of Credit Suisse writes, this "validates Oracle's consolidation strategy. It will be interesting if this leads to even more SAP deals despite their longstanding assertion that Oracle's approach was flawed."
More interestingly, it also puts SAP on a collision course with Microsoft. Maybe this even means that SAP gets into the Sharepoint game?
... Read moreSAP announced Sunday afternoon it plans to acquire Business Objects in a cash deal valued at slightly more than $6.8 billion.
The acquisition, which is expected to close in the first quarter of 2008, is SAP's largest acquisition ever. The deal is especially noteworthy for SAP, which has tended to favor developing its own technology rather than acquiring it. The acquisition of Business Objects, a leading player in business intelligence software, is designed to dovetail into SAP's previously announced plans to double its addressable market by 2010, said Henning Kagermann, SAP chief executive, during a press conference Sunday afternoon.Nearly a year ago, SAP noticed the business intelligence market was growing at a rapid rate. SAP's customers, meanwhile, have been calling on the enterprise applications giant to add an end-to-end solution for structured and unstructured business analytics and embed them into SAP's business suite, Kagermann noted.
"This acquisition accelerates our growth potential," Kagermann said.
Forrester Research estimates that the business-performance solutions market will grow by 11 percent through 2010.
Business Objects, based in San Jose, Calif., and Paris, will operate as a stand-alone business and be part of the SAP Group.
Roughly 40 percent of Business Objects' customers use SAP, said John Schwarz, Business Objects chief executive.
The companies said there is very little overlap among their products and neither company expects significant restructuring as a result.
With the Business Objects acquisition, SAP will be further positioned to compete against archrival Oracle. Last March, Oracle acquired business intelligence tool developer Hyperion Solutions in a $3.3 billion deal.
When the Hyperion acquisition was announced, Oracle said that "thousands of SAP customers" relied on Hyperion for things such as financial analysis and systems of record for financial reporting. With its acquisition, Oracle said, SAP customers would need to tie into Oracle's Hyperion software to view and analyze their underlying SAP enterprise resource planning (ERP) data.
Business Objects' Schwarz, however, noted that his company is roughly three times the size of Hyperion.
UPDATE on October 8 at 7:22 a.m. PDT:Analysts, however, believe the SAP-Business Objects deal was driven by Oracle's Hyperion acquisition and that restructuring is likely in store for the companies.
Roughly 20 percent of Business Objects' business overlaps with that of SAP, in the performance-management software side. Between them, SAP and Business Objects offer three financial consolidation products.
The other 80 percent of Business Objects' business, which deals with business-intelligence tools, is where SAP will find value, said Paul Hamerman, an enterprise applications analyst with Forrester Research.
"I think there will be restructuring. There are personnel and real estate costs that SAP will have to rationalize," Hamerman said.
Just last April, SAP apparently wasn't convinced it needed to buy itself into the business intelligence market. Hamerman said he spoke with Kagermann at Sapphire, SAP's annual user conference, where the SAP CEO said he couldn't expect to make a big push into the market with an acquisition and still get a return on investment by 2010.
Meanwhile, AMR Research notes that spending on business-intelligence and performance-management products is expected to reach $23.8 billion by the end of the year, up 3.6 percent from the previous year.
Shares of Business Objects soared 16 percent in morning trading on Monday to $58.36 a share. SAP shares dropped 5.2 percent to $56.14 a share.
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