Business Objects Nabs Crystal Decisions in Surprise Move

Company says it's seizing the opportunity to take a leadership position in the BI market


By Stephen Swoyer

In a surprise move, Business Objects SA on Friday announced that it will acquire business intelligence (BI) and reporting specialist Crystal Decisions Inc. in a cash and stock deal valued at $820 million.

"With this combination, we will seize the opportunity to take a leadership position in the BI market," Business Objects’ chairman and CEO Bernard Liautaud said in a statement. "The two companies are not only successful leaders in their space but have extremely complementary businesses, across many dimensions: product capabilities, distribution channels, international coverage, and skillset."

On paper, at least, analysts say that the deal appears to make sense. After all, Business Objects is facing mounting pressure from arch-rival Cognos Inc.—which expects to unveil a new enterprise reporting suite, dubbed ReportNet (, later this year—and from other competitors with production reporting products as well.

“[ReportNet] was undoubtedly a factor. Also, MicroStrategy is due to release a production-reporting tool by [the fourth quarter of this year]. So strategically it’s important they move fast,” comments Wayne Eckerson, director of The Data Warehousing Institute (TDWI).

Eckerson and other analysts believe that the strengths of both companies complement one another. “Business Objects needed to develop a production reporting tool—which is Crystal’s strength—and Crystal needed to develop thin client end-user reporting and OLAP tools, which is BO’s strength,” Eckerson argues.

Mike Schiff, vice president of e-business and business intelligence with research firm Current Analysis Inc., says that Crystal’s enterprise reporting and production reporting capabilities outstrip those that Business Objects provides in its own tool. “Crystal is clearly one of the leaders in true enterprise reporting. A lot of the BI vendors have been trying to say that when it comes to enterprise reporting, you don’t need anyone else because we can do everything. But their customers have found that you need specialists, like Crystal, Brio, or Actuate,” he says.

TDWI’s Eckerson points out that, culturally speaking, both vendors have traditionally addressed separate BI constituencies with their respective reporting tools. “Traditionally, [BusinessObjects] has been used by power users to interactively analyze data in data warehouses, Crystal has been used to deliver static operational reports to casual users,” he says.

With any merger of this size, there are the usual concerns about execution and integration. For his part, Current Analysis’ Schiff believes that Business Objects recent acquisition track record—it acquired extraction, transformation and loading (ETL) specialist Acta last summer—will serve it well as it tries to integrate Crystal’s technology and corporate culture with its own. “Business Objects has a fairly solid reputation of quickly integrating the organizations that they’ve acquired. Look what they did with Acta—they’re managing them a lot more effectively than Acta ever did,” he argues.

Analysts suggest that Business Objects move ratchets up the pressure on competitors such as Actuate and Brio, even as it delivers a pre-emptive counter-strike to Cognos’ ReportNet. Competitive concerns include Crystal’s partnerships—with Microsoft Corp., SAP AG, and others—which were established largely on the basis of that company’s neutrality. “It’s a very good move for Business Objects, and it makes even more sense if these partnerships can be maintained. But we’ll have to wait and see on that one,” comments Schiff.

That’s not all. Business Objects’ acquisition of Crystal could open it up to a charge of hypocrisy. “The acquisition poses one troubling problem for Business Objects. They’ve always touted their single tool approach to BI—one tool, one GUI for doing query, reporting, and OLAP. Now they have a non-integrated product line, committing the sin they’ve attacked Cognos for in the past,” observes TDWI’s Eckerson.