SAP makes a grab for Business Objects

SAP will acquire Business Objects for $6 billion (4.8 billion euros) in a move that will enable it to offer organizations more advanced business intelligence and decision-making solutions. The companies expect to close the deal in the first quarter of 2008.

Walldorf, Germany-based SAP is a leading supplier of business software, such as customer relationship management, enterprise resource planning and supply change management applications, with more than 41,200 customers in some 120 countries.

Business Objects, headquartered in Paris, France, is a provider of business intelligence software with solutions spanning the information discovery and delivery, information management, analysis and performance management categories for more than 44,000 customers worldwide.

The acquisition will allow SAP to significantly increase its revenues from new products, including addressing the growing demands of business users, company officials said.

"SAP will accelerate its growth in the business user segment, while complementing the company's successful organic growth strategy," said Henning Kagermann, chief executive officer of SAP.

SAP offers a broad range of products, including one of the industry's first business process platforms, the NetWeaver service-oriented architecture platform, and an on-demand business solution for mid-sized companies called SAP Business ByDesign.

"SAP can now take the opportunity to focus on the industry's next high-growth opportunity by accelerating and enhancing our efforts for the business user category," Kagermann, said.

"The combination of Business Objects and SAP means that we can truly amplify the reach of business intelligence ? from the C-suite to Main Street," said Bernard Liautaud, chairman and founder of Business Objects.

Both companies count numerous U.S. federal, state and local government agencies as customers. For example, SAP software has been deployed by the Defense Logistics Agency, National Geospatial Intelligence Agency, Naval Supply System Command, North Carolina and Erie County, N.Y.

Meanwhile, Business Objects has provided data warehouse and business intelligence solutions to the Defense Department, performance management software to the Environmental Protection Agency and a data warehouse support system to Wisconsin's Department of Health Services.

Business Objects will operate as a stand-alone business within the SAP Group. Business Objects customers will continue to benefit from open, broad and integrated business intelligence solutions ? independent of databases and applications ? while also gaining the advantage of application alignment for business analytics, officials from both companies said.

Business Objects will significantly enhance its business intelligence portfolio scope and capacity with SAP people, know-how and networks, they said.

When the transaction is complete, John Schwarz will continue as CEO of the Business Objects entity and is expected to become a member of the SAP executive board. Doug Merritt, corporate officer, business user at SAP, will then join the Business Objects entity and report to Schwarz.

Subject to the closing, SAP's Supervisory Board intends to propose to elect Liautaud to the board at the company's next shareholder meeting. Until that time, Liautaud will have an advisory role to SAP's Kagermann on strategy and integration.

Rutrell Yasin writes for Government Computer News, an 1105 Government Information Group publication.