SAP Acquires Business Objects – Small and Mid-Market Benefits Are Not Crystal Clear

The wires were buzzing Monday with the news that SAP had acquired Business Objects  (aka Crystal Reports) for $6.7 billion dollars.

Crystal Reports allows someone with a basic understanding of how a database is constructed to turn raw data into useful information fairly quickly.

Crystal Reports is the Microsoft Word of the reporting industry. While there are other word processors out there, Word owns 90+% of the word processing market. That’s about the same market share that Crystal has in the reporting space

According to the Wall Street Journal  this acquisition is a move directed at small and mid-market business (SMBs) and because the emerging business intelligence market has good growth potential.

Personally from a technology standpoint, I think that this acquisition is a great move on SAP’s part. I guess if I had $6 billion dollars lying around I might have considered the purchase myself.

While this is a great move for SAP, I am not so sure it is for small mid-market business.

To begin with, Business Objects has been positioning Crystal for higher end ERP systems for the last 3 to 4 years.

The “data repository” for example, a Crystal feature that allows the user to store logic and reuse it, once could be utilized by someone with a stand alone license, but not anymore…Now features such as this require the purchase of a server license, as a result becomes more expensive and is more labor intensive to implement and administer.

In my opinion, the general direction of Crystal before the acquisition was toward the high end. With the acquisition … who knows what direction it will take?

Then there’s the issue of the scores of other ERP / Business Software publishers that have strategic partnerships with Business Objects.

Needless to say, SAP is not going to want to kill the goose that laid the golden egg, but let’s face it … SAP, Oracle, Infor and many others are all in direct competition…I just can’t imagine that this acquisition is going to somehow strengthen these partnerships.

Finally, if there is one thing that SAP does not understand, it is small and mid-market business. Again, I just don’t see how this acquisition is going to help anything other than larger companies.

There are other reporting tools out there and I suspect that this acquisition will create a vacuum and build momentum for the competition. This might be prime time for another reporting and/or business intelligence provider to take the top dog seat in the mid market.

Time will tell…