Analysis: SAP's inevitable BI acquisition

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Benefits to businesses

Less rare, though, are companies where a limited set of BI functions are good enough for the job at hand.

Most ERP vendors, including Oracle, Microsoft, IFS and even SAP, prior to the Business Objects deal, offered some reporting and analysis tools within their environments.

For businesses that need to carry out task-specific BI, and want to do that quickly, there is a strong case for using the ERP vendors' tools. Taking information out of such environments, bringing into a central data warehouse and then running analysis tools inevitably brings delays and, potentially, data errors.

For SAP customers, the Business Objects deal should bring richer analysis tools to SAP applications. That might not happen immediately, not least because SAP intends to maintain Business Objects as a separate operation. But it is in line with the trend towards "operational" business intelligence and one that CIOs are likely to welcome.

"A much more important and longer term objective is what we call 'operationalising' the intelligence from the business data," according to David Bradshaw, principal analyst at Ovum. "Here Business Objects brings great breadth of BI and performance management capabilities to SAP. Managing processes and transactions efficiently is only half the challenge that the typical business faces - the other half (at least) is trying to decide what is the smart thing is to do."

SAP users might now be tempted to consolidate their BI tools around Business Objects, driven by the promise of greater integration with Netweaver (SAP's middleware environment) and its core applications.

But for companies that are not large-scale SAP customers, the benefits might be more marginal. Much will depend on the resources given to Business Objects to continue to develop its own product lines independently of SAP.

Much will also depend on how well Business Objects maintains relationships with other ERP and CRM vendors, including Oracle and especially, Microsoft. Microsoft is due to start shipping its BI integration tool, PerformancePoint Server, in the next few weeks and this could provide an interesting alternative for CIOs looking for an application-independent BI system.

Some CIOs, and indeed finance directors, may well want to maintain such an independent BI layer. Doing so should help to ensure that reporting and analysis are not tied to any one business application, making it easier to upgrade either BI or the applications that feed it or to add additional applications, for example as a result of an acquisition.

Although the pool of independent business intelligence vendors is shrinking, there are still some strong choices for companies that do not want to go down the SAP-Business Objects or Oracle-Hyperion route, says Nigel Montgomery, at AMR Research.

"There are still a number of independent BI vendors who will certainly step into the void they perceive has been left by SAP's purchase of Business Objects," he said. "These include Cognos, SAS, MicroStrategy and Information Builders. And Microsoft has all the pieces: it just needs to execute well on getting its message, and its software, out there."

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