Business Objects completes Crystal Decisions purchase
Careful integration needed
Business Objects' acquisition of Crystal Decisions, for a total of $1.2 billion, has created one of the largest business intelligence companies around. While the merger does look like a sound pairing on paper, as always, careful integration will be required on product, sales and indeed cultural levels.
Few could have predicted French-American business intelligence vendor Business Objects' move for Crystal Decisions, a Canadian enterprise reporting vendor. Not only did the two companies appear to be bitter rivals, but Crystal also announced in May that it had filed for a $172.5 million IPO, which has now been cancelled.
As Crystal Decisions was a privately held concern, it was relatively unknown on Wall Street and the investment community at large. But based on its publicly declared figures, Crystal appeared to be financially sound. The company achieved eleven consecutive quarters of steady growth, and had a net margin of 14%, much higher than Business Objects' margin of 9%. Last year, Crystal's revenues totaled $271 million, versus Business Objects' $466 million.
The completion of the merger has created one of the biggest business intelligence (BI) companies with over $736 million in combined revenue, 3,800 employees and over 24,000 customers. It has propelled Business Objects above arch-rival Cognos, which reported $551 million in revenue in 2002, and which had consistently topped several industry analyst BI charts as the largest vendor by market share.
Specifically, the deal will strengthen Business Objects' foothold in the enterprise reporting market; a segment of the BI market that Crystal dominated with its Crystal Reports authoring tool and Crystal Enterprise platform products, which have amassed over 14 million licenses worldwide.
According to Bernard Liautaud, chairman and chief executive officer, "the combination of Business Objects and Crystal Decisions is extremely complementary, and delivers strength across the board." Mr Liautaud added that the company now has the standard reporting product and the market's leading interactive query and analysis solution.
Yet while the merger looks good on paper, there will need to be some careful integration at product, sales and cultural levels. The signs are encouraging however, as Business Objects did a sterling job of assimilating Acta's technology, sales team and developers into its fold.