Here are the slides that were shown as part of the official SAP / Business Objects press conference.
My notes on the Q&A, from the English-language translation of the Paris webcast — NOT verbatim, accurate quotes.
Were you also approached by other players? If so, who were they?
I’m not going to comment on the long list of people who were once interested in Business Objects over the last few years. As the leader in the market, it was logical that people approach us.
When were you first approached? Did you need days or weeks to conclude the agreement?
First in July, and we started talking and negotiating. It all became more intense in the last few weeks. They were open and professional.
Were you clients of each other?
No, not yet, but we will be, and I think this will be profitable for both of us. But we have been partners for some time. The Business Objects platform is NetWeaver certified, etc.
Can you comment on the market value and annual growth? Do you think standalone vendors have a future?
Standalone: it’s a very interesting question — you should ask them.
BI market growth: there are regularly published figures, by IDC etc., currently around 10% or more. This includes revenue and maintenance. The total value is around 20 billion dollars by 2010, for BI and Performance Management.
Don’t you think the price is too high? You negotiated in a very satisfactory way. Is Business Objects going to remain autonomous?
I think the value is normal given the recent acquisitions. The growth in this market is very rapid, and we’re in a leading position, so the price is in line with all these elements. As regards to the future, we’re maintaining our sites in France, of course, and we’ll make sure that the Business Objects staff can stay with us and be happy with us. Once the transaction is complete, Business Objects will be responsible for all Business User issues. If everything goes well, Bernard will become a member of the SAP board, John Schwarz will be part of the executive Board of SAP, so you see that we want to make sure that we work together.
Background of the agreement? I’m surprised when I look at the results. Are you sure that you’ve made the most of the share value? e.g. auctions, etc.
We’re not going to comment on the results of this quarter. We’ve just published some new figures, and only on October 24th will we be talking again, when Jim Tolonen will comment on them.
We were approached by different companies, so we got a lot of insight into the market valuations. We didn’t do an auction process. We tried to assess the market and the eventual players, and we trust the results that we obtained, and we’re sure that the result will benefit the shareholders and the company.
Why is this a cash offer, why not partly cash and partly shares?
Because we thought that this would be best for the shareholders.
Does this mean you already have agreements with shareholders?
I can’t comment on that.
In the history of SAP, you’ve always put the emphasis on organic growth. Is this a crossroads in your history, and that you’re going to acquire other companies?
We never said that we would never buy other companies. However, you’re right, so far, our strategy has always been to promote organic growth and to complete with minor acquisitions. But after 16 quarters of solid organic growth, we’d like to continue, but BI is a new market, and we need to reinforce our offer if we’re going to make the best of this opportunity. It seems to us that we had to acquire this company to complete our strategy. In the previous months, acquired Pilot software and Outlooksoft.
Can you give a figure on the synergies you hope to generate?
We will be communicating on detailed synergies once the transaction has closed. But we are expecting more synergies from growth rather than from cost reductions.
You said this is not the first acquisition in this space. Would you be looking at others, for example Cognos in Canada?
I think we should first concentrate on this marriage. I never comment on future acquisitions.
You talked about operational BI. It’s a concept you’ve been pursuing for several years, but so far without much success. Can you give an idea of what will happen in the future? And if you take Outlooksoft, isn’t that too many acquisitions?
Outlooksoft: No, I think we’ll be able to combine our assets, we’ll have an excellent portfolio. I’m not saying there’s no overlap — there’s always some when you bring two companies together. But I think we’ll manage it.
Operational BI: the reason this didn’t surge ahead as well as could be expected is that the software suppliers weren’t the same as the process suppliers. So now, I think we’ll be able to give a new dimension to this. SAP has a new process platform, and we have real-time BI offerings, so we can very efficiently integrate intelligent processes onto the process platform, so this is one of the synergies that is available to us.