Given Business Objectsâ€™ French headquarters, I say â€œPlus ca change, plus câ€™est les meme choseâ€ (apologies to my French teacher on Avenue Gambetta if I got those little apostrophes in the wrong place or the les should be la). Business Objectsâ€™ has announced the â€œFirst and Only Complete Close and Forecast and Cost Control Solutions for the Office of Finance.â€ I enjoy parsing such marketing claims, especially when I recall writing about the same words in 1970 for Honeywellâ€™s announcement of its Model 58 (based on Bull small business systems that Honeywell had inherited from the GE computer division acquisition the year before). I admit to just a little hyperbole almost 40 years ago. In the unlikely case the CFO could have actually figured out how to use the Model 58, he would have been the only one sitting in front of it because it was a single-user machine. And he surely would have been a he at the time.
However, as an impartial analyst in most of the years since Gambetta, I think I could have accurately used Business Objectsâ€™ (BOBJ) words of this week to describe the SAP (SAP) R/2 â€œControllerâ€ module 20 years ago. So whatâ€™s really new in the Business Objectsâ€™ announcement? The announcement is all about how Business Objects combined its SRC (2005)/Armstrong Laing (2006)/Cartesis (2007) acquisitions with â€˜heritageâ€™ products (including earlier acquired products such as Crystal Reports-2004). Parsing of the claim involves accepting the factoid that the new suiteâ€™s profitability component and built-in governance are the first in a suite. I have not researched that factoid but Business Objects is a credible organization.
More relevant to the claim is the fact that the suite is what the company calls â€œbest of breed.â€ That is, it is not built into an ERP suite such as SAPâ€™s or Oracleâ€™s (see the â€œasideâ€ below) but is dedicated totally to the CFO. I donâ€™t buy any advantage in such a pure-play positioning from any application software supplier. There are no particular plusses in not being more tightly linked to the chart of accounts, ledger, payables, receivables, and so forth as in the SAP and Oracle (ORCL) suites. In fact, in my research I have consistently found that users are willing to accept less functionality in individual software components in order to get the total-suite advantages of â€œone vendor to blame.â€ Oracle and SAP (chosen only as examples) bring the added advantage of providing other industry-specific components as well for everything from telecommunications to mining (a dozen or so for Oracle, over two dozen for SAP). This is especially relevant when Business Objects highlights its two vertical extensions (supply chain for distributors, funds transfer pricing for financial services).
My research has consistently found that functionality rules, not a suite value proposition or a best of breed value proposition. So if Business Objects can deliver 50% or more of SAPâ€™s and Oracleâ€™s comparable feature line-up, users will fairly consider it. The Business Objects productsâ€™ role-specific features are an example of how it might achieve that threshold. Another way that Business Objects can differentiate this offering is via the Open Appliance initiative it announced in the spring. But it implied that it needs to get its initiative partners up to speed before putting together such a package.
In fact, currently Business Objects will â€œsellâ€ the grouping, which it calls EPM XI, as a suite but it is not yet priced as a suite. A representative said at the press/analyst meeting that users typically choose to deploy a single â€œapplication plus some of the reporting toolsâ€ first although a decision is often based on an entire suiteâ€™s benefits. Business Objects probably cannot price it all together yet because the â€œforecasting and cost controlâ€ and â€œcloseâ€ modules do not become generally available until the end of calendar year.
On the same call, a â€œprivate investorâ€ zeroed in on this issue coming at it from a different direction. The question was, â€œIs the RFP process changing vis a vis Business Objectsâ€™ best of breed approachâ€ versus SAPâ€™s and Oracleâ€™s more broad-based value proposition? My guess is that the investor is gauging the outlook that Business Objects might be an Oracle acquisition target.
Assuming Business Objects retains its independence, there is a lot of opportunity in its eventually packaging EPM XI in an appliance with, for example, Open Appliance alliance partner Netezza (NZ). This would really bring things full circle back to the fibs I told about the Honeywell Model 58 hardware/software bundle in 1970.
As an aside, Marge Breyaâ€”Business Objectsâ€™ VP of marketingâ€”got a kick out of the fact that an Oracle employee, representing of one of the ERP players that competes with Business Objectsâ€™ â€œbest-of-breedâ€ approach, called in to the analyst/press conference. It was great French diplomacy that Business Objects answered Oracleâ€™s question fully. Could you see the reverse happening? Maybe Henning could call into to Larryâ€™s financial analyst call on September 20.
— Dennis Byron
Update: According to SeekingAlpha on September 17 the rumor of a possible acquistion of Business Objects mentioned above is picking up steam.