Oracle rival SAP to pay $6.8 billion for Business Objects

SAP, the big German software company that competes with Oracle, has agreed to buy Business Objects, a leader in the fast-growing market for business intelligence software, for $6.8 billion.

The move underlines the appeal of companies that make software used to cull through the huge stores of data that corporations accumulate on their own and over the Web to search for insights to help them cut costs, spot sales opportunities and outwit rivals.

Makers of business intelligence software have become takeover targets in recent months. The largest previous deal came in May when Redwood City software maker Oracle bought Hyperion Solutions, a Santa Clara business intelligence software company, for $3.3 billion.

The deal is a departure from SAP's longtime approach of shunning big acquisitions. But in a conference call Sunday, SAP Chief Executive Henning Kagermann said the purchase of Business Objects, which has dual headquarters in Paris and San Jose, was an exceptional case.

"It's a fast-growing market - business intelligence," Kagermann said.

Thomas Hofmann, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany, said the deal is "a dramatic shift in strategy" for SAP. "They're really moving toward the direction of Oracle and maybe that's because they're feeling Oracle is coming closer."

Business Objects had been rumored to be a takeover target for more than a month. Its share price had risen about 15 percent in the last few weeks, as SAP, Oracle and IBM were all said to be interested in buying the company.

The SAP offer of 42 euros a share in cash is roughly 20 percent above last week's closing price for Business Objects and places a value of more than 4.8 billion euros ($6.8 billion) on the company.

In its most recent quarter, Business Objects reported a 23 percent increase in sales, to $363 million, while profit rose 68 percent to $66 million.

Business Objects CEO John Schwarz said in the conference call that 40 percent of his company's customers are SAP customers. "We have a tremendous opportunity to align and package solutions together," he said.

SAP, analysts say, needs to add more capabilities to its business software to increase sales and prompt customers to buy new versions. The promise that business intelligence software might be able to glean insights from the data flowing through SAP's enterprise software could justify the price of the Business Objects purchase, analysts say.

The goal, Kagermann said, was to put "better analytics" into "our end-to-end business process software." He said he did not anticipate cutting Business Objects' workforce.

The $18-billion-a-year business intelligence market is increasingly moving into the hands of larger companies. Microsoft has made a big push into business intelligence in the last two years.

Author: Steve Lohr @ New York Times

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Oracle Raises Retention Profile

Proactive enterprise CIOs might have Oracle to thank for saving their companies millions, and even billions, of dollars in the event their called to task during civil or criminal litigation.

On Monday, the database software company rolled out Universal Records Management 10g Release 3. The platform includes enhanced retention and management features for e-mail and other files hanging out in corporate datacenters.

Increased regulatory oversight mandated by Sarbanes-Oxley and the like requires records-management software systems to cull data not only from content repositories but also from file stores, archives and a slew of business applications.

"The key thing we look at is organizations have information they need to keep as a matter of record," Brian Dirking, product director for Oracle's universal records management group, told InternetNews.com. "We're offering something that not only manages the retention and disposition of these records but broadly manages it throughout all of a company's applications, archives and content management systems."

Oracle's new platform allows companies to access content, set the parameters for deleting or archiving files and obtain information using the crawling, indexing and search functionality.

The software can also enforce records-management policies in the background to determine what data to keep or delete while users continue using the various applications rather than requiring them to launch a separate records management application.

Another, and perhaps most important feature of Oracle's platform is that it helps save companies money. Companies embroiled in litigation or regulatory reviews are painfully aware of the cost of data recovery.

"Anything electronic is recoverable and admissible in court," Dirking said. "It gets very expensive when you have firms charging more than $1,800 per gigabyte for paralegals to review all your documents in the discovery process "

Gartner expects 50 percent of Global 2000 companies to implement records-management software by 2010, up from about 25 percent in 2005.

"Litigation and e-discovery will drive demand for records management over the next four or five years," Kenneth Chin, an analyst at Gartner, told InternetNews.com. "In the past, records management was mainly targeted at managing physical documents. Now the focus is on electronic documents like e-mail."

Gartner said worldwide spending for enterprise records management software licenses and maintenance totaled $350 million in 2006 and is projected to increase about 30 percent a year through 2011.

This expected demand is music to the ears of established content management software providers like EMC, IBM and Open Text, as well as emerging players, such as Mimosa Systems and Autonomy, which bought content archiving pioneer Zantaz in July.

Oracle Universal Records Management, a component of its Fusion middleware platform, is priced at $100,000 per processor and includes new adapters for out-of-the-box integration with third-party archiving and storage applications.

Author: Larry Barrett @ internetnews.com

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SunGard challenges Oracle in public sector

Oracle is facing tough competition from SunGard Data Systems Inc. in its drive to gain a bigger share of the lucrative public sector software market.

Just ask Judy Owen, the systems manager for the City of St. Petersburg, Fla. Owen deals with both companies on a regular basis, and in her opinion, Oracle has too much going on right now to effectively address the public sector's needs.

"Honestly, I think that Oracle should stay out of [the public sector] for right now because I think they're having a terribly hard time as an organization with direction and with support and with consistency across their product lines," she said. "They're brewing at a tremendous rate and I don't think they're managing it well, so I think that they should slow down."

Both Oracle and SunGard expanded their presence in the public sector through acquisition. Last November, Oracle purchased SPL WorldGroup Inc., a maker of revenue and operations management software for the utilities industry. SunGard, a public sector stalwart in its own right, purchased local government software maker HTE Inc. in early 2003. Both companies also offer a wide range of financials and human resources applications.

The differences between the have to do with size and scope, said Ray Wang, an analyst with Cambridge, Mass.-based Forrester Research Inc. SunGard, which is much smaller than Oracle, is more specialized and offers systems that drill down to fill the highly specific needs of government agencies and utilities, he explained.

Oracle, which boasts a large number of Oracle Database customers in the public sector, takes a broader approach in terms of functionality, Wang said, and one of its primary goals is to up-sell those public sector Database users on PeopleSoft and E-Business Suite applications.

"The public sector is a space that Oracle really wants to get their feet into," Wang said. "The SunGard products are a lot more specialized, though. They have the finance products and they've got the human resources stuff. But SunGard also has things like student billing, registration and accounting. And they've got other things, especially for local governments."

Wang said that another player to watch in the public sector applications market is Hansen Information Technologies, which was recently acquired by Infor.

An Oracle-SunGard user speaks out

The City of St. Petersburg -- a longtime user of HTE's land parcel management systems -- became a SunGard customer by default after the acquisition. But according to Owen, the transition has been fairly seamless.

"I don't think that [HTE was] purchased as an independent subsidiary, but that's how they seem to be operating," she said. "We're dealing with the same people and there hasn't been a lot of pain for us in SunGard having bought them."

All city departments that deal with land use SunGard-HTE systems, including the building and permits, occupational tax and licensing, utilities and codes enforcement departments, she said.

SunGard-HTE's utilities suite makes up the core of the city's utility billing system, and it allows citizens to do things like pay bills and apply for inspections and permits online, Owen said.

The SunGard-HTE systems are integrated with the Oracle E-Business Suite Financials applications that cover general ledger accounting and enterprise resource planning. The city, which also uses Oracle E-Business Suite Human Resources applications, went live with Oracle Financials about two years ago. Some of the other financials modules that the city uses cover payroll, purchasing, iProcurement, accounts receivable and accounts payable.

"When we went through the [Oracle ERP implementation] there were lots of challenges with the interfaces," Owen said. "I think there are always interface challenges. But it's working well now."

Owen said her group considered the possibility of standardizing on either Oracle or SunGard, but decided that it wouldn't work out.

"Oracle couldn't do the parcel-based information -- the land-based systems," Owen said. "Oracle just couldn't do it."

Oracle and SunGard square off on support

With few exceptions, SunGard has been good on the technical support side of things, but Owen can't currently say the same for Oracle.

"[Oracle] support is problematic at best," she said. "A lot of times the poor guys on the other end of the support lines don't know what the sales guys are selling."

Author: Mark Brunelli @ SearchOracle.com

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