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May 25, 2007

BobInxight – Business Objects Promises Inxights on Text

Damn! Just when I thought I was on top of the current wave of frenzied business intelligence (BI) consolidation, Business Objects goes out and buys Inxight software, a company that can't even spell!

And where was I stuck? In Sweden at a conference with a dodgy wireless connection. Hence I'm writing this blog offline en route back home – specifically at 'Neil's Pub' in London's Heathrow Terminal 3 departures lounge, grabbing a last minute pint and some genuine fish and chips before I cram myself into row 41J of a packed economy class-cabin.

The Background
Business Objects acquired privately-held Inxight Software for an undisclosed sum last Tuesday (May 22) for an undisclosed sum – though I peg it in the ball-park of a modest $50-70 million since Business Objects has always been a prudent value-shopper when it comes to acquisitions. The deal is expected to close in July. Why so long, is anyone's guess?

Inxight started out as a text analysis and visualization vendor, with a strong linguistic capability. The company's software, born out of Xerox's famous PARC Center in Palo Alto, generates some stunning visualizations of unstructured data schema including a deep dive into their relationships. But the company has since branched out into federated and desktop search and more recently unstructured data cleansing – "ETL for text" as it were.

Why Buy?
Business Objects wants to extend the scope of its analytic prowess beyond the tidy world of structured relational data, which is where BI has been aimed at since almost the dawn of corporate computing. Folding in a capability to search and extract information from text into the Business Objects world has always been the next obvious next step for the company.

The keyword you're going to hear from Business Objects is unified and federated query and search across both structured and unstructured data (including blogs like this one!). Business Objects already owns a federated (EII) query capability that it acquired from Medience. While Inxight is more of a federated search product, Medience is a federated query tool. Business Objects now has to find a way to marry both on a single platform. It also has the small matter of building a new class of business applications around it – more on that below.

Sounds like a classic "mash-up" of two new technologies waiting to happen. True to some extent. BI and search are just in the early dating phase right now. They have still to get into bed together.

Competitive Considerations
Having taken a long time to pass the billion dollar revenue milestone, Business Objects knows it can't take as long to reach the two billion mark. Hence organic growth around its BI tools was never going to be enough; hence its acquisitions of data integration, data quality software and performance management.

But Unlike Cartesis, which was a defensive acquisition, Inxight is an offensive move in the market that scores the company brownie points in "vision" around unstructured data.

BI is a "leap-frog" and "keeping up with the Joneses" market right now and rivals like Cognos might be tempted to pursue similar acquisition opportunities. There are certainly plenty of small/niche text analytics firms out there like Temis (a French company that probably feels shunned by Paris-based Business Objects) waiting to be acquired. Cognos partners closely with Composite for federated capabilities.

Inxight's existing relationships with other BI vendors are likely to be severed, including the OEM deals it has with IBM, SAP, Microsoft and Oracle. That might just prompt more merger and acquisition in this space. It will also open up opportunities for Inxight's rivals to fill the gaps with new OEMs of their own. One vendor that stands to benefit is Denodo, which has a federated engine that supports both query and search against corporate and external (Web) data.

Business Objects acquisition will be good news for independent vendors like Attensity and Clarabridge and Intelligent that have been sweating to bring integrated text and BI analytics into the mainstream market for several years.

Business Objects isn't without competition. SAS Institute and SPSS also have integrated text analytics plays on the market. And Informatica acquired Itemfield late last year to signal its own foray into the unstructured data integration world.

And Reuters is buying ClearForest another text-analytics pioneer that is pushing unified BI. Reuters a competitor to Business Objects? Just doesn't sound right does it. Perhaps a revised wording of that statement would be "was pushing", as Reuters probably has its own plans for ClearForest in its publishing business. One competitor gone.

Integration – Where, How and What For?
This is a logical buy. But at the risk of raining on Business Objects parade, I'm still a bit skeptical.

Business said that Inxight's technology will enhance its current BI/BPM offerings. Timo Elliott's blog – Timo by the way is the Palo Maldini of the BI world (for those unfamiliar to Italian soccer, Maldini has stayed with his first club AC Milan for his entire career) – holds an optimistic view of "structured and unstructured analysis finally coming together in tangible ways."

Check it out at: http://www.timoelliott.com/blog/

Elliott admittedly does a great job describing the guts of Inxight's key technology products. What he doesn't do so well is say exactly how BI and text analytics come together in a corporate environment where companies are less concerned with federated searches, entity extraction and nifty visualizations.

In other words where are the value-generating business applications for this deal? It is one thing to buy a technology that could be complementary in theory. But it's another thing to bring practical integration and applications to the table that add real business value.

OK Business Objects marketing Tsar Marge Breya has cited sentiment analysis surveys one application for integrated BI-text analytics. But that's hardly a mainstream business opportunity to fork out $50-plus million.

Perhaps the most obvious integration point is in Business Objects' data integration. Informatica made quick work of seamless integration of Itemfield's text-extraction technology into its PowerCenter ETL product. Business Objects has been OEMing Inxight for several years and a quick inclusion of Inxight text analytics into its Data Integrator product will probably be foremost on their minds.

Business Objects might try to bring a few new integrated BI and text mining applications to market in the near future. But are customers ready for this. Probably not right now. Many organizations I speak with are still grappling with integrating their structured data, let alone think about bringing text into the mix.

And what about Inxight's innovative data exploration tools – TableLens, StarTree and TimeWall? How will they fit into Business Objects existing xCelsius visualization tools?

We have to speculate for now at least since Business Objects is holding its integration and new application plan cards close to its chest right now.

Wrap
Integrating BI and search remains a hot and exciting topic for vendors. But this integration goes more than skin-deep. Superficially it's easy to grasp the "Google-like-experience" appeal of search in BI. But the devil in dealing with structured and unstructured data lies in the detail – specifically reconciling the ambiguity of the metadata.

Nor will making use of the combination of BI and search will not be a simple matter of creating a single interface to structured and unstructured content. It will demand careful assessment and development of customer- and revenue-relevant applications. But in reality few BI practitioners have yet to forge real strategies for search technology. On the other side of the fence, enterprise search vendors like FAST and Autonomy have also recently dipped their toes into BI, but practical projects that use search engines combined with a BI tool or data warehouse are hard to find today.

Admittedly Business Objects and the IT market in general needs to do more work in tapping business value from mountains of unstructured data. If Business Objects can prove the worth of grafting traditional BI and analytics on unstructured content that might signal a much more profound architectural shift in data warehouse architectures – one that is designed for content, not data. Now that sounds very much like a XML cum database server thing.

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