When, in January 2004, business intelligence (BI) vendor Business Objects unveiled its roadmap for the integration of the software from Crystal Decisions, the rival it was acquiring for $1.2 billion, market watchers were taken aback.
The target, to join the two software lines within a year, seemed over-aggressive, potentially setting the company up for a fall.
Fast forward 12 months and Business Objects chairman and CEO Bernard Liautaud is looking pleased with himself. "Lots of people were sceptical, but we felt it was important to give all our customers a clear vision of where we were going," he says. That vision culminated in the release of Business Objects XI in January 2005 – a single integrated application from the two software code sets.
The sceptics were quick to retrench. "Business Objects has already done what few of us thought it could so quickly," says Keith Gile, principal analyst at IT market watcher Forrester Research.
But Liautaud is not resting on his laurels. The company is due to release its full-year results on 7 February 2005, and analysts will be on the lookout for any indications that the integration efforts have impacted sales.
While Liautaud has been overseeing the amalgamation of the two businesses to create the largest single vendor of query, analysis and reporting software, the company is only too aware of the intensity of the competition from its archrivals Cognos, MicroStrategy and Hyperion. After all, the raison d'être behind buying Crystal Decision was to give Business Objects the size and the breadth of products to set it apart from other BI vendors – and to plug a hole in its reporting software line-up.
Liautaud believes that many organisations are at a stage where they are keen to standardise on a single BI platform. Historically, many BI products were bought piecemeal at a departmental unit level. Standardising across the enterprise can bring down costs and reduce management overheads, says Liautaud.
But while BI vendors have been keen to push the message of standardisation, it has been something of a slow burner for customers. "Standardisation is a trend that is building slowly. Wait for the right time and standardise BI when your company has a compelling reason to do so," advises Jacqueline Coolidge, a research director at analyst AMR Research.
However, there are optimistic predictions about the overall growth of the market, as end users look for the most effective way to grow their business.
On the face of it, BI vendors look set for a series of bumper years – analyst company IDC predicts that the $7 billion BI software market will double by 2006. But the promise of such rich pickings has attracted the attention of a wealth of new entrants into the market; Oracle is back with a new BI product; SAP is targeting the sector; and Microsoft is progressively building its arsenal.
Liautaud may take some comfort from Gartner's prediction that the pure-play BI vendors look likely to continue to dominate sales, but the analysts only rate the chances as 0.6 probability.
Liautaud is keen to stress Business Objects' independence from applications and databases as the main weapon in tackling the threat from larger software competitors. Customers want to be able to extract data from multiple sources in order to analyse business performance, he explains. "The ERP [enterprise resource planning] vendors are trying to offer BI to supplement their core product – inevitably that means the extraction tools are optimised for their products, so you get sub-optimisation with others," suggests Liautaud. "You're just not going to see someone use an Oracle front-end to access [IBM's database] DB2."
