Following in March this year to 3.3 billion acquisition of Oracle Hyperion, the business intelligence software with another senior vice president and a huge acquisition, SAP to 6.8 billion acquisition of global business intelligence software giant Business Objects (referred to as BO). Software giant M & A wave will rise "adverse impacts," the Chinese software vendors a more passive position.
Business intelligence software acquisition, merger wave is intensified.
October 7, Germany, SAP software predators announced 4.8 billion euros (68 billion) acquisition of France heavily in business intelligence software company Business Objects (referred to as BO). This is the second in March this year to 3.3 billion acquisition of Oracle's Hyperion, the business intelligence software in the field of another huge acquisition. Of course, this is also the most generous so far SAP a history of acquisitions.
The rise of the global software giant merger wave, in the bigger market environment, with UF and Kingdee represented domestic software companies, how will their living room?
Forced to compete both sides readily fitted
According to IDC statistics, in 2006 to 894 million U.S. dollars BO sit tight in the income of the top spot in the field of business intelligence software, private software company, SAS Zeyi 679 million U.S. dollars of total revenue ranked second, followed by years of income of 622 million U.S. dollars of Cognos. And Microsoft, Hyperion, Oracle and SAP have also entered the field of business intelligence software, the top 10. It is worth noting, however, SAP and Oracle are their relatively low ranking. Business intelligence software, rapid development and expansion of its market rate is for all to see, Oracle and SAP the two software giants will not turn a blind eye, so the industry has been rumored that Oracle and SAP will be through the acquisition of business intelligence to improve their own business.
Sure enough, on March 1 this year, Oracle announced a 3.3 billion U.S. dollars on the premium of the Hyperion acquisition. And this acquisition, so that the original partnership with Hyperion, SAP is the situation become very passive. Therefore, analysts believe, SAP will soon be buying a business intelligence vendor to make up their own shortcomings, which, BO, Cognos objectives set out in speculation.
SAP in 2005 proposed a strategy to double the size of the company by 2010. Previously, SAP mainly depend on endogenous growth (Organic Growth), which mainly rely on their own development, combined with small-scale acquired supplemental to the implementation of this strategic objective. However, IDG Consulting analyst Xu Bin believes that the rise of mergers and acquisitions trend in the software business, enterprise-class business intelligence applications more and more attention to the larger environment, SAP lost its Hyperion business intelligence on the support, not only the ERP system lack of business intelligence technology, support, and SAP will soon lose the right to speak in this area, the company plans to double the size may come to nothing.
On the other hand, has always been in the business intelligence leading player in the field of BO, also has released earnings warning - due to disappointing license fees, BO revenue fall in third-quarter sales will be lower than expected.
Forced by competitive pressures, SAP and BO can be said to hit it off.
"This acquisition is an opportunity for SAP, SAP will accelerate the development in the field of business intelligence." SAP Global CEO of Sun Han Ning (Henning Kagermann), said at a news conference, business intelligence software, there are currently 100 million market, is the enterprise software market, the fastest growing segment.
BO company CEO John Schwarz said, the deal will stop the two sides carried out in sales to repeat input, effectively reducing the cost of sales. In addition, BO can use SAP customers a great resource to get more market opportunities.
The acquisition of irrational behavior?
According to foreign media reports, the SAP acquisition of BO, is in accordance with 42 euros a share, higher than the week before the latest stock price of BO by 17% over the last 3 months, 33% average price premium of the stock acquisition. SAP Chief Financial Officer Werner Brandt also revealed to the media, the acquisition by the company next year will affect the overall cost, but he expects the company will be implemented in 2009 profit.
In such a time to such a high price for the acquisition, SAP has been the behavior of some analysts questioned.
Many analysts believe, SAP's acquisition of the high cost of the BO, is the Oracle acquisition of Hyperion to the "delayed reaction." Global Equities Research analyst Trip Chowdhry evaluation of the acquisition as "too late and too expensive." Therefore, analysts are not optimistic about the future trend of SAP shares. Issued after the acquisition news, SAP's shares on the stock market in Frankfurt, 4.8%, while the BO is in the Paris stock market climbed 17.2%.
"Although the acquisition of SAP has spent a considerable price, but I do not think this is how surprised people." Chowdhry said that in the past few months, on the SAP acquisition speculation in the industry has long been flying up. And he believes that such a deal as early as three years ago should be completed. "It's like in the past three years, SAP has been in a sleeping state. Now suddenly awakened, and began trying in this ever-changing industry, occupation of a place."
Goldman Sachs analyst believes that, SAP abundant funds acquisition in the case played an important role, but they warned that, SAP now need to prove that they can successfully integrate BO.
In addition, Henning Kagermann told the media a month ago, said, SAP is no pressure to make large acquisitions. But after just one month, SAP will be a such a big acquisition, so some analysts believe that the acquisition strategy for SAP BO also means a fundamental change.
Cowen, an analyst said the company, SAP, amounts recognized in the actions Oracle's acquisition strategy is correct. However, some analysts say, SAP has been the main claim to support small businesses, while the BO is in the recently released services and strategies for medium-sized enterprises have good reason to believe that, SAP is likely to be issued soon in mid-market force.
However, Cowen analyst also said that this may affect the relationship between SAP and Microsoft - as BO is in the mid-market Microsoft's major competitors.
Domestic software vendors a more passive
Oracle acquisition of Hyperion and SAP BO acquisition shows that the global wave of software industry mergers and acquisitions, not just "大鱼吃小鱼" but began to powerful combination. IDG Consulting analyst Xu Bin forecast, according to this development, the future world will be only four major software companies - Microsoft, IBM, SAP and Oracle. Therefore, he believes that the survival of domestic software companies will be increasingly difficult environment.
To UF, for example, in the business intelligence field, UF was originally co-operation with the BO, it is because the BO could have been a more independent business, but also in the domestic market share of less, and UF is no direct conflict of interest. But the UF ERP system and SAP's ERP system directly compete, so acquisition is complete, UF continue to use the technology BO is unlikely that this will make UF become very passive position.
With the development of domestic information, the next 5 years will be the development of internal systems integration period, which also requires a breakthrough in ERP systems. Where business intelligence is the key. But look at the domestic business intelligence field, is currently in infancy stage, accounting for the major market share is still IBM, Oracle, Microsoft, SAS and other foreign companies, although some domestic companies are doing, but do not amount to anything; and from a technical perspective, business intelligence needs of technology companies is extremely fine and closely associated with the database, the domestic small business is difficult to break through the international software giant. Therefore, the UF and Kingdee domestic software vendors still rely on IBM, Oracle and other foreign software giants in the field of business intelligence will become more passive position.
However, Xu Bin said that this does not mean that this loss of domestic enterprises survival and development. After all, just the rise of China business intelligence, but also take years to develop a more mature market. Therefore, in these few years, if China's business intelligence software company to explore new business models still have access to good opportunities for development.