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« May M&A-dness | Main | Microsoft: BI Economics 'Out of Whack' » May 09, 2007A Mildly Contrarian View of SAP, OutlookSoft, and Vendor Consolidation Generally 
As noted in my colleague Elizabeth Book's Integration Watch blog yesterday, SAP AG plans to acquire OutlookSoft Corp. I have two opinions about this deal – one about what it means to SAP, OutlookSoft, and their immediately surrounding ecosystems of competitors, customers, partners, and prospects, and one about what it means more generally. Opinion the First: The primary intent of the deal is made obvious in the headline, subhead, and most of the copy contained in SAP's news release. SAP has decided that the person it wants to sell to is the CFO. Not the CIO, CTO, or other IT leader. Not the CEO. Not some idealized "coalition of the willing" including business and IT decision-makers. SAP is going after the keeper of the keys to the corporate coffers. From that perspective, OutlookSoft makes a lot of sense. That company has focused on the CFO from its inception, according to its CEO as quoted in the release. And both SAP and OutlookSoft are increasingly positioning the CFO as the person under the most consistent pressure to "meet regulatory requirements and drive efficiencies while at the same time playing a strategic role in driving the growth and profitability of the business." Now, this positioning may sound disturbingly familiar to many of you. It may sound more familiar if you replace "CFO" with "CIO" or "CTO" in the outreach collateral of many if not most other IT vendors. The point here, though, is that SAP has identified its primary marketing target, and is building and acquiring the tools it needs to deliver to the people in that role the information they need to achieve the goals noted above. This puts a two-pronged challenge in front of SAP's and OutlookSoft's competitors. Those companies have not only got to come up with similarly comprehensive, integrated solutions, but they've got to package and deliver them in ways that directly translate into benefit to beleaguered CFOs. A tall order, especially for those companies not already well versed in persuading that particular audience. But an interesting, perhaps constricting focus, given the large number of potential client companies out there that don't even have CFOs, but still have needs for comprehensive, integrated business intelligence and performance support. (SAP's work with Microsoft Corp. on "Duet" and that solution's expected progeny demonstrate SAP's covering of its bets in this regard.) So we'll just have to wait and see where SAP ultimately focuses most of its efforts and energy, and how well it does with this current positioning focus. Opinion the Second: This is simply another example of vendors responding with alacrity (if not panic) to increasing disappointment among their business customers with the BI solutions those vendors have been offering so far. The issue in a nutshell: what's needed is a comprehensive, holistic, and integrated view of everything that's going on in the business. What's also needed is the ability to focus on those things that represent potentially disruptive problems or opportunities to improve performance. Vendors scrambling to maintain and/or avoid losing market share and account control are seeking acquisitions, mergers, and partnerships to fill in and flesh out their solutions portfolios, in ways they hope align more closely with ever-evolving user demands and goals. Which should be good, more or less. But is nowhere near where it should be yet, nor anything like over. The number of independent companies continues to shrink, but I'm pretty sure there are new companies planning to emerge even as you read this. So expect the consolidation tango to continue – and use this period of turbulence and uncertainty to sharpen and refine focus on your own company's specific needs and goals. This will maximize the likelihood that when you evaluate candidate solutions and vendors, your criteria will take precedence over their marketing goals. Posted by mdortch in BI • Business Intelligence | Digg This | Add to del.icio.us Trackback Pings TrackBack URL for this entry: |
