Successful M&A to Turn Sour?

Left: John Schwarz, CEO Business Objects SAP

When SAP AG swallowed Vancouver’s Business Objects last year in a wave of consolidations in the business intelligence space, there was some question of whether the move was a good or bad one for the Vancouver based-business intelligence giant. More specifically, the big question around Business Objects was whether the $US6.78-billion (at the time) takeover would turn the entrepreneurial-thinking shop into a lumbering elephant that would become a loser in the race to dominate its business category. But just last month, it seemed the opposite had occurred. Instead of a category loser, Business Objects became the category killer. Although SAP generally left Business Objects alone to run its own business instead of chewing it up like so much sauerkraut, it also began a massive process to integrate Business Objects’ business analysis and reporting software into SAP’s huge enterprise reporting and management technology. Normally, these kind of mergers are fraught with problems and missteps, because buyers often try to impose foreign corporate cultures on the company that was bought, stepping all over worker identities and personal views of themselves. But, if SAP authorities can be believed, the dual strategies worked. Last month, a Bloomberg report quotes John Schwarz, CEO of the SAP AG Business Objects unit, as saying that Business Objects is “dramatically” gaining market share on rivals who were also bought up during the consolidation wave. According to Schwartz, a management board member with the Germany-based SAP, the merger and acquisitions route hasn’t been as smooth for Business Objects’ two biggest rivals, Cognos of Ottawa which was bought by IBM, and Hyperion Solutions Corp, which was bought by Oracle Corp. earlier, have stumbled following their mergers. Oracle gutted the Hyperion product line and IBM hasn’t been able to “move the needle” at all with Cognos, he said. Of course that was before the big market crash and global credit squeeze. SAP is now apparently cutting costs like like a madman, so who knows what that successful M&A will look like a year from now?