SAP's Business Objects

CIO - Company: SAP

Employees: 53,500

2010 Revenue: $17.25 billion

Co-CEOs: Jim Hagemann Snabe and Bill McDermott

What They Do: SAP acquired Business Objects in 1997 to establish itself in the hot market for business intelligence software. Business Objects has a robust suite of BI software (now up to version 4.0) and a new BI app for the iPad.

The Pitch

SAP got into business intelligence in a big way with the 2007 acquisition of Business Objects. "For every use case in BI, they've got a good tool," says Forrester Research analyst Boris Evelson.

Moreover, Business Objects products aren't dependent on the broader SAP product stack, according to Steve Lucas, general manager of business analytics and technology at SAP. "Half of our [Business Objects] development resources are focused on non-SAP use cases," he says. "Over half of our customers have nothing from SAP except analytics."

SAP is also positioning its new Hana in-memory database engine as a foundation for the core Business Objects suite and a new series of specialized analytics applications.

Many Business Objects customers are large enterprises, but SAP also sells subsets of the full suite to small and midsize companies.

The Catch

Despite all the strengths of Business Objects' products, they have lacked a unified feel, giving the user a somewhat disjointed experience, Evelson says.

However, the recent release of Business Objects 4.0 solves that problem, with a unified interface, a common data-access layer and other improvements, Lucas says.

While acknowledging that 4.0 is "a step in the right direction," Evelson maintains that SAP has more integration work to do "under the covers."

The other problem with 4.0 is its late arrival. Originally, SAP talked about a general availability date in 2010. Then it held a launch event in February of this year, where it said the release would be in May. In the end, the date slipped to mid-September.

"When a vendor's late by a few weeks or months, it's one thing," Evelson says. But with yearlong delays, "how can you as a buyer make plans and depend on them?"

SAP held off the general release for legitimate and important reasons, according to Lucas: "We set some pretty stringent go-live criteria for ourselves. If we didn't get to those, we weren't going to go live."

Only a handful of customers participating in the 4.0 ramp-up program--SAP's name for when products are out of beta but not yet in mainstream release--were still experiencing some issues by the end, he adds.

"Some of it was implementation, some of it was customers requesting features that weren't really bug [fixes]," Lucas says.

The Score

Arch Coal is currently running version 3.1 of the Business Objects BI suite with solid success, says Jamie Oswald, a senior BI analyst there.

The mining company, which doesn't run any other applications from SAP, is looking to upgrade to 4.0 "probably at the beginning of next year," Oswald says. Right now, work on upgrading the company's mining supply chain software is a top priority.

"I like the Business Objects road map of bringing these tools together and still making them platform-agnostic," Oswald says.

The software has already been paying serious dividends, he adds. For example, Arch Coal is now able to track and manage which equipment parts are still under warranty as they need to be replaced, which has led to significant cost savings.