Business Objects rises on talk of software mergers
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Shares in Business Objects (BOBJ.PA: Quote, Profile, Research) rallied on Monday as analysts pointed to the French-American company as an obvious takeover target in a consolidating software sector.
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IBM has released a series of SOA products for integrating software applications and improving business processes, and said more customers now understand the SOA concept.
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Surgical software will help the company expand.
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In the software business, you can't just sit around--there's always a new feature to add or the Joneses to keep up with.
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More large acquisitions may be in the software giant's future.
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With consolidation at a fever pitch in the enterprise BI (business intelligence) market, it would be understandable if MicroStrategy customers felt nervous, given that the vendor remains as one of the market&#39;s few independents.After all,&#160;Business Objects now has the support of new parent company SAP, thanks to a $6.7 billion acquisition, while&#160;Hyperion is now part of Oracle, which spent $3.3 billion to buy it. Meanwhile,&#160;IBM is expected to soon finalize its $5 billion purchase of Cognos.Yet, MicroStrategy customers interviewed at the company&#39;s MicroStrategy World 2008 conference in Miami expressed confidence in the vendor and said its independent status gives it certain advantages over Business Objects, SAP, and Cognos.In particular, several customers said they like that MicroStrategy will remain free of pressures stemming from having to prioritize supporting complementary products from a parent company and, conversely, diluting support for similar products from competing companies.Lindsey Aubuchon, MIS director at W.E. Aubuchon, which operates hardware stores in New England, said her company likes to have flexibility to mix and match IT products as it sees fit, creating multi-vendor environments to achieve its desired implementations. &quot;My company likes to have openness to choose what they want,&quot; said Aubuchon, whose employer has been a MicroStrategy customer for about seven years.Consequently, she nodded in agreement when MicroStrategy&#39;s CEO Michael Saylor said in his keynote at the event that the vendor strives to be agnostic and neutral with respect to making its products work with complementary wares from other vendors.&quot;Our view is to be Switzerland in this business, and to make sure we protect your investment when we give you the ability to tap into lots of different vendors and technology architectures to achieve your goal,&quot; Saylor said.He predicted that Cognos, Business Objects and Hyperion will see their product roadmaps re-routed based on competitive considerations handed down by their new parent companies.As an independent, MicroStrategy will continue to support a wide variety of complementary, third-party products, such as Web browsers, operating systems, processors, databases and application servers, based on the needs of its customers and on market dynamics, Saylor said. &quot;The market needs a vendor that provides the flexibility we can provide,&quot; he said.Phillip Julian, sales operations and senior data management analyst at Inspire Pharmaceuticals in Durham, North Carolina, is all for product agnosticism and flexibility in IT vendors. The company recently acquired the MicroStrategy software to generate better, more interactive and visually appealing reports, he said. Until now, Inspire had been analyzing data with SAS Institute data-mining software and creating reports with Microsoft&#39;s Excel.&quot;We&#39;re doing it so we get into really good technology that would help us grow,&quot; Julian said. &quot;I want to move us into another generation [of reporting software] where we&#39;re looking at something that&#39;s more graphical, more visual. We need to have something that the VP of sales and the sales force can understand.&quot;Similar expectations led Robeks, a chain of fruit juice establishments, to make a hefty investment in the MicroStrategy platform, which it is in the process of implementing. With most of its presence in the U.S. West Coast, Manhattan Beach, California-based Robeks is looking to grow significantly in other parts of the U.S. and the world in the coming years, and, to support those efforts, it needs better reporting and analysis tools than the in-house ones it currently uses.&quot;Being able to analyze [sales and marketing] data more accurately will help us grow the business. We&#39;re in a very quick growth mode right now,&quot; said IS Director Pete Carvajal.As a new customer, he was interested in hearing Saylor address the recent wave of market consolidation to find out what MicroStrategy&#39;s position is. &quot;Them emphasizing that they&#39;re one of the players in the market that&#39;s not in the middle of all the turmoil of all the consolidation was good to hear and to understand what the future is,&quot; he said.&quot;It&#39;s important for them to come out and indicate the whys and whens of their business model moving forward. This is a huge investment for my company, and the last thing I want to do is spend all this time and money in an application that gets absorbed by a bigger company and maybe disappears,&quot; Carvajal said.
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The software company's investments are showing some promise.
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IBM  may acquire more software companies this year following two recent purchases as it tries to boost software's share of total IBM profit to 50 percent, according to analysts.
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The increase resulted from a sharp rise in sales in its business software unit, the company said.
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(InfoWorld) - While consolidation can be a sign of a mature, slowing market, the M&A activity happening now, especially seen in context of this week's six-year Nasdaq Composite Index high, signals confidence in IT and prospects for growth. High-tech mergers and acquisitions hit a record number last year and the trend continues. Wednesday, Cisco Systems announcedÂ it will make a $135 million acquisition of Reactivity, a maker of XML gateway and security hardware to manage Web services. Tuesday,Â SAP said it would acquire Pilot Software, a supplier of strategy management software, while Wind River SystemsÂ saidÂ it bought FSMLabs' embedded Linux technology for real-time applications. SAP rival Software AG said Wednesday thatÂ it will be focusing on SOA products and services and plans acquisitions to broaden its product portfolio. Companies outside of traditional enterprise IT are also part of the M&A trend. Satellite radio operators Sirius Satellite RadioÂ and XM Satellite Radio Holdings, with total revenue of about $1.5 billion, announced Monday thatÂ they plan to merge. Though different sectors within IT are subject to unique market situations, globalization and trends in financing are the prime forces driving M&A, according to Eric Gebaide, managing director of Innovation Advisors, a New York investment firm. After the "general meltdown" in 2001, it's been hard for small companies, especially those under $75 million in revenue, to go public, Gebaide said. This makes them acquisition targets. "Another factor is the need to start having global solutions," Gebaide said. The globalization of technology is underscored by an Innovation Advisers study, based on using data sourced from Capital IQ, a division of Standard & Poor's, that shows that the total percentage of U.S.-based companies participating in M&A activity continued to decline to 51.6 percent from 57.9 percent in 2005. Overall M&A transactions hit a record last year: The total number of transactions in 2006 was 4,669, exceeding 2005's total of 3,455, and the 2000 total of 2,871 deals at the peak of the dot-com boom, according to Innovations Advisers. But the total amount of dollars spent on M&A last year was less than in 2000: $295.8 billion, while the 2000 transaction total was $490.3 billion. Company valuations are more reasonable now than in 2000. Recent deals show software companies are being valued at two to four times revenue, while service companies are valued at one to two times revenue, Gebaide said. Historically, these numbers are more normal then the valuations of the dot-com boom. Meanwhile, services companies are forecasting solid revenue growth this year -- a sign that users are investing in IT, Gebaide points out. The Nasdaq close on Wednesday, at 2518.42, was the highest in six years. On Thursday it closed up again, at 2524.94. Coming right after earnings season, this is another sign that confidence is high. Although overall global revenue growth in IT is expected to be modest compared to the dot-com boom --- most estimates peg IT growth this year at about 6.5 percent -- the expansion is likely to be more sustainable than it was seven years ago. Though the IT market may not be as exuberant as it was in 2000, many investors are certainly willing to settle for more stable, rational growth. Â
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The computer maker is making more inroads into the lucrative software space.
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Business Objects released new software WednesdayÂ that combines EPM (enterprise performance management), BI, and data integration into a comprehensive suite aimed at CFOs and business finance managers.
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IBM is moving aggressively into the software space.
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One company sees a shift in business software habits, right before its eyes.
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The software giant tries to drum up industry support to scrutinize and potentially block the proposed merger.
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The ObjectWeb Consortium added portal, content, and business process management elements to the stack of open source middleware projects it promotes, potentially providing businesses with access to cheaper technology, members of the group announced Tuesday.
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The Story: Look in the mirror, Mr. or Ms. IT buyer. You?ve got more muscle than ever ? and you did it without steroids.[ Slideshow: 2007's top underreported tech stories ]                                                    Despite the wave of consolidation sweeping the industry, buyers have actually gained more leverage than ever when it comes to making deals with their vendors, notes a PricewaterhouseCoopers analysis. ?Software buyers need to realize that the pendulum is beginning to swing in their favor and that there are an increasing number of alternatives in today?s software market,? concurs Gartner analyst William Snyder (no relation to this writer).There are a lot of reasons for the swing, but one certainly stands out: The shift to SaaS (software as a service). The poster child for this phenomenon is Salesforce.com. "Both its development and delivery models are having a disruptive effect on the entire CRM market,? notes Forrester Research analyst Bill Band. But it?s not just Salesforce: By 2011, Snyder says, fully 25 percent of all new business software will be delivered as a service as Salesforce and other vendors push upstream from the small-business market. Already, SaaS providers make up the majority of sales for several segments of human resources applications, and is well-established for supply-chain management.[ InfoClipzflash video primer: Software as a Service ]SaaS is just the first wave of services that are pushing pricing power over to buyers: The more recent move to Web services and the beginnings of SOA (service-oriented architecture) deployment are encouraging the use of modular software, which in turn cuts development costs, makes it harder for vendors to sell expensive suites, and lessens the need for expensive consulting services.And yet another factor is upping buyer?s power, notes Gartner?s Snyder: the emergence of third-party support options that are reducing software?s TCO (total cost of ownership). ?Maintenance services have been a quasi-monopoly for software vendors,? he said. ?For many years, only the software vendor had rights to the source code of the critical components of the system. This made it impossible to go to an open, competitive market to obtain upgrades, services and support, which in turn made it impossible to negotiate maintenance fees.?Interestingly another software trend ? the growth of virtualization ? is beginning to affect pricing for hardware, particularly servers. A report by Infiniti Research suggests that server shipments will start declining in 2008: ?The server market of tomorrow will be a value game and not a volume game.? And that means better pricing for hardware, too.Don?t let your head swell too much, but Gartner vice president Mark McDonald credits ?savvy CIOs? for containing costs that were once out of control. ?They?re saying, ?I want you to implement in a way that gives me the advantage over my competition? ? and they?re not accepting the traditional vendor model, which favors homogeneity and the economics of scale.?The Bottom Line: Chances are that you?re looking at SaaS, Web services, SOA, virtualization, open source, and other technology-delivery methods for a variety of specific reasons, without realizing the cumulative effect is to give you more pricing power. Now that you?ve got the power, use it.Complete list of 2007 underreported tech stories: 1.? Java is becoming the new Cobol 2.? Sun Microsystems is back in the game 3.? Hackers take aim at Mac OS X 4.? There are some threats you can worry less about 5.? Companies may have found a way around H-1B visa limits 6.? Open source?s new commercial strategy 7.? End-to-end Ethernet finally arrives 8.? Blade servers arrive for the masses 9.? BI is dead; long live BI 10. Balance of power shifts to software buyers