Peter Traynor recently sat with Franz Aman who is Vice-President, Business Intelligence Platform Product Marketing at Business Objects, and discussed corporate and product developments post-merger with SAP.
Peter Traynor: Could you please recap what your talk today was about?
Franz Aman: Steve Lucas talked about some of the rationale behind the acquisition and our vision going forward and how that’s going to help customers. There are a couple of key trends that we see in the industry that we’re trying to address with our portfolio.
One of them is that information comes in all shapes and sizes these days and more and more comes in unstructured form. Also a lot of the information these days doesn’t necessarily reside on your network; it could actually be with your supplier or business partner someplace else – outside of your firewall.
And more and more, you need to pay attention and tap into third party benchmark data or macro-economic data. You want to know how the rest of your industry is doing. You may be feeling great about the 16% growth rate you’ve just achieved and then you look at the market and it went up 23%. Well, you’ve lost share.
PT: That’s right.
FA: So we’re also helping companies providing BI-consumable information that gives them that kind of ability. So information is one big topic.
The other trend is about people. There are tons of “digital natives” coming to the workplace and they have never seen a life without the internet. A lot of these kids have been running their lives with Facebook, MySpace and so forth. Then they come into the enterprise and see the enterprise software and they wonder what is being used. So it’s really critical that we all live much more of a Web 2.0 lifestyle and not just to do the digital natives a favor but to bring something really interesting and important to the party.
For one, they collaborate naturally – a whole lot better than many of us have traditionally done. When it comes down to it, if a person makes a decision, that decision is always better when it’s made after talking to others, for getting more perspectives and really collaborating on it. So in addition to giving people all the right information for their decision making we’re also doing a lot to help that collaboration – to make it natural, make it seamless and make it much more of a Web 2.0-style experience with mashups and so forth. So that becomes an actual asset and not a burden for people in the enterprise.
The third really important trend is that more and more businesses are not just core-type enterprises; they do everything. They focus on their core competencies and so many more things get outsourced. You may look at someone who just with one product line outsources to the BMW Design Center and they get it manufactured in Taiwan and so forth. And for every product line they make different choices depending on their core competencies and where their strength is – is it in distribution and marketing or around the actual engineering, is it in design?
Companies develop these business networks where now it’s a collection of enterprises and if you’re to be responsible for all those products you still have to find a sight into what is going on. You have to know what your inventory is, where you’re at in planning for one product and manage performance across the entire business network. So that’s another important trend where business becomes very global, very distributed with different product lines but you want to still have the same grip on the business. That’s another key trend we’re responding to with our portfolios.
With SAP and Business Objects combining, there’s been a lot of consolidation in the market and sometimes it’s not even clear who went first, who copied whom and so forth. What’s different with the SAP/Business Objects combination is that every one of us was a true leader in its own space – SAP around execution and helping companies execute really, really well. We though, were focused on the information side, making sure that people have full insight and can then make better decisions and then turn them into action. Now by combining the two portfolios, you can close the gap between strategy and execution and we’re the leaders in those two spaces so it’s just a wonderful marriage.
PT: Is the culture working as well because sometimes it takes a bit of time to adjust?
FA: It’s hysterical! I have a German accent and I’m a Business Objects native and this is the first German company I’ve ever worked for. But culturally, we’ve been discovering a lot of things; we’ve been coming from different angles but we fundamentally try to address a lot of the same issues and problems and it turns out that there are so many cultures within our companies and there’s so much diversity within our own employees. It actually meshes very nicely.
Business Objects has always had a very diverse multinational, transnational culture with huge employee bases in Canada, the U.S., in Asia, a huge engineering center in Paris. There are a lot of similar things across the companies and by now we’re sometimes finishing each other’s sentences. It feels good and it actually works well.
PT: Has there been integration of SAP staff into Business Objects in various divisions and vice versa?
FA: We’ve done it both ways and it’s really important that we keep the customer in mind and we’re focused on what we need to do. A couple of things that we said are really critical for us to do and achieve are:
We have to provide an agnostic intelligence platform that bridges any and all systems out there – regardless of what database, what application, what ERP system and so forth. When you look at it, Business Objects has always been good at that and from Henning Kagermann and down that’s exactly the mandate that we got. We have some great talent and some products that are agnostic – with no dependency on SAP and we were told to run that, own that and combine it. So we took some folks who had been in SAP in the Business User Group and they came into Business Objects and SAP company organization run by John Schwarz – no change there since he was the CEO of Business Objects – he’s running it and reporting to Henning.
Then in areas where it makes sense to share the same backbone and infrastructure and so forth be it around legal and some marketing we’ve been transferring people into the teams at SAP so that we can get more critical mass and also get them infected with the BI “virus” if you will. It’s a lifestyle and you want to make sure that people actually embrace it so that there’s no “anti-body” or issues. We’re really working together and linking arms so yes, we’ve gone both ways.
PT: Interesting. You mentioned unstructured data as a major trend. What is the company doing to presumably aggressively address that?
FA: Last year Business Objects made an acquisition of Inxight and they were actually a Xerox PARC company with about 75 patents and really the leader in unstructured text analysis. It’s not just about understanding what’s being said in a text document and let me give you a simple example.
I have a Google Alert set up for Business Objects and Google sends me an alert every thirty minutes or something but it doesn’t do a very good job because Google looks at matches – just text matches of “Business Objects” and of course Business Objects is used in programming since it’s a construct in programming.
PT: So you get all the non-relevant stuff.
FA: I get all this non-relevant stuff because Google has no concept of the company “Business Objects” and that is exactly what our text analytics capability has.
PT: It’s not even case sensitive.
FA: You’re totally right. So the software that we have is really able to understand – to put meaning and context into text. It understands that this text is about the company Business Objects and a transaction is like an acquisition and then you can then sort and categorize.
We also do sentiment extraction which is an interesting thing. In a lot of customer support situations you have things like just because of the use of certain words someone expresses that they’re actually not very happy. And with a statement like “that just cannot be” and “I need to talk to your Manager” – it’s terminology like that that is used that we use to extract the sentiment of the customer.
PT: So do you quantify that in some way?
FA: Yes. For a customer support scenario like that in a call centre environment there is basically either a smiley face, a somewhat grumpy face or a really grumpy face in red based on that kind of sentiment extraction. The power of bringing that together with deterministic BI is that you can now mesh that in and determine that you know you have unhappy customers you can really focus and tackle the problem with the most important and best customers.
So you would take the metrics of the data you have in your system about total revenue, lifetime value or however you define that and combine that with the text analytics semantic capability and request a picture of the support scenario for those particular customers and then you can take action quickly.
PT: It’s a fascinating part of BI and certainly one of the most powerful going forward. SAP has always been prominent in predictive analytics; is their technology and this new search technology starting to mesh?
FA: A couple of things; search and text analysis while it helps and contributes, predictive analytics is actually a broader topic now. We’ve also made some announcements around predictive; we’re actually building that part of our portfolio very dramatically and there are certainly companies out there that are considered leaders in predictive. But when you look at it, what a lot of them do is that they kind of work with the white lab coat –they work with people who have PhDs and heavy research types and Business Objects has always been about bringing intelligence to all of us and making it much more approachable and digestible. At the end of the day every one of us makes hundreds of decisions in a day and our goal really, is to help everyone who needs information to make better decisions get that information.
So what we’re doing with predictive also is making it much more approachable and providing it to people much more broadly so there’s more things coming in that space. But predictive is important to us; it’s definitely an advanced analytics space that needs a lot of work because it’s too elitist right now.
PT: So you’re going to bring it to the masses as it were.
FA: Yes.
PT: We’ll look for announcements on that going forward. From a corporate standpoint, I assume you’ll continue to be on the acquisition trail when it makes sense and grow through both acquisitions, and of course greater market share and so forth.
FA: You’ve heard the story both from the SAP side and the Business Objects side so we’re certainly always interested in other opportunities to grow or solve interesting technology problems with targeted acquisitions. We’re not commenting on any specifics of course but is that going to remain part of what we do? Absolutely.
PT: Of all the mergers that we’ve seen in the last year or two which one do you think was the most interesting for the industry? After yours, of course.
FA: Well, that’s an interesting question. I always found ours so interesting. What I found interesting was IBM’s acquisition of Cognos for a couple of reasons. One is that we’re a huge partner with IBM and there are so many things we do together so you wonder what the benefit is that IBM expects to accrue and come out of it. It seems like that while Cognos is a business intelligence play but it seems more an infrastructure play at the end of the day. That was interesting and certainly while it had been rumored for some time it was an interesting move and little bit more unusual than what some of the other people have been doing for some time.
PT: It was something of a surprise in some respects that it was IBM that got them although the purchase of Cognos was pretty inevitable somewhat. Of course I’m from Canada and Cognos is Ottawa-based so we were following that story with great interest.
FA: Oh, I can imagine. I mean we’re the biggest employer in Vancouver – we have about an 1,800-people office in Vancouver doing research and tons of different functions there. And that’s from the Crystal acquisition.
PT: Any new developments or directions for the company that you would like to discuss? You’re continuing to grow?
FA: Yes, absolutely. The arrows are pointing in the right direction from our perspective and we’re certainly very optimistic given the combination of forces. We think we have the best portfolio out there and acquisition or not, we just keep on executing. Literally a couple of weeks after the acquisition was officially closed, we shipped a new version of our business development platform XI 3.0. I don’t think we missed a beat executing strongly. I couldn’t be more thrilled about the product capabilities that we have; it’s the broadest end-to-end BI portfolio in the marketplace right now.
PT: That’s very exciting.
FA: Yes, totally exciting. There are so many interesting things coming to the table from the SAP side, technologies we can incorporate that will help us do even more amazing things.
PT: A lot of integration then – cross pollination.
FA: Well, integration is only one aspect but while some others have gone out and said that integration is job number one that is not what customers are actually interested in. There’s integration that customers will benefit from and that makes sense but you have got to take a sensible approach to it. And there’s a lot of innovation that is really critical and needed for customers so you have to find the right balance between innovation and integration and nothing should be done that does not have a fundamental impact and value to customers.
When we refer to “customers” this is the traditional SAP customer base because we do want to be based in the SAP space but it’s also our traditional non-SAP Business Objects customer base. We have more revenue in non-SAP installed base than we have in SAP-installed base as Business Objects as part of the SAP group. So we are totally vested in making things really exciting for our non-SAP installed based customers.
PT: You’re not going to do one thing that will lessen their customer experience.
FA: Absolutely not. We’re actually looking at how we can bring more innovations to everyone across the board. We absolutely look at which customers are running on Oracle ERP or Oracle data warehouses because we’re going to get them all the same innovations and benefits that everyone else gets.
So we’re not cutting back in what we do on the Oracle platform or we’re not going any slower in non-SAP technologies and we’re not requiring any one of our customers without SAP to have it – there’s no built-in “must have SAP” requirement in our statements.
PT: Thank you so much for taking the time. It was a pleasure meeting you.