Tuesday, May 23, 2006

Consolidations in the BI industry (Out of Topic - But interesting)

Microsoft acquires ProClarity

On April 3, 2006, Microsoft announced that it had agreed to acquire the privately held ProClarity. The price was not disclosed, but we speculate that it was close to or just below $50m, which is lower than ProClarity had been seeking in 2005. Subject to regulatory approval, the deal is expected to close in May 2006. The OLAP Survey 5 found that ProClarity was the most widely used third party front-end for Analysis Services, which may be one of the reasons for this acquisition.

Business Objects acquires SRC

Having previously derided Cognos for diversifying into planning and consolidation applications, Business Objects reversed strategy and followed suit by acquiring SRC Software. The purchase agreement was announced on July 20, 2005, and the price is $100m cash. This is a high price to pay for a company with revenues of only about $26.5m in 2004 and 135 employees, though SRC’s 2005 run rate was probably closer to $35m. Business Objects expects to take a $5m charge on the conclusion of the deal.

PwC divests Cartesis

PwC has divested Cartesis, the French consolidation system vendor, to a venture capital consortium led by Apax Partners Funds. This move was forced by the Sarbanes-Oxley rules which were preventing corporations audited by PwC from doing business with Cartesis. The other members of the consortium are Advent Venture Partners, CDP Capital Technology Ventures and Partech International. The price was not disclosed. The effect of Sarbanes-Oxley had been hurting Cartesis for some time, so it was widely rumored for months that PwC had put it up for sale.

Business Objects buys Crystal Decisions for $1.2bn

In the largest BI consolidation so far, Business Objects announced on July 18 2003 that it was to buy its fast growing competitor, Crystal Decisions, for approximately $820m, based on the July 17 BOBJ closing stock price ($300m in cash and 26.5m BOBJ shares). The deal eventually closed on December 11, and the rise of the BOBJ stock price since July raised the net value of the deal to $1.2bn, by far the largest BI acquisition to date.

Hyperion Solutions buys Brio

As part of the consolidation rush in the BI industry, Hyperion Solutions announced on July 23 that it was to buy the fading Brio Software. The deal closed in mid-October.

Brio had been struggling for some time and was unable to compete against Business Objects, Cognos, Crystal and MicroStrategy so it is no surprise to see it being acquired. Hyperion had often been rumored as the buyer, so this is also no surprise. Hyperion is paying approximately $142m in another mixed cash/stock deal. The shrinking, loss-making Brio had revenues of $101.8m in the year to June 2003.

Geac buys Comshare

The Canadian ERP vendor Geac announced on June 23, 2003 that it was buying Comshare, for $52m in cash. The deal closed in mid August.

Comshare, the longest established BI vendor, was formed in 1966 and had revenues of $58.3m in the year ending March 2003. Geac is buying Comshare for its MPC product, the development and marketing of which will continue under the new ownership. However, the tarnished Comshare brand is expected to be dropped soon.

Cognos buys Adaytum

Cognos announced on December 19, 2002, that it was acquiring Adaytum Software, and the transaction closed on 13 January 2003. The final consideration was $157.1m, slightly lower than the $160m initially announced. Cognos views this as a business, not just a technology acquisition, and hopes to maintain Adaytum’s high growth rate, using Adaytum’s existing sales and marketing machine. It views this as justifying the high price paid — the technology alone would not be so valuable to Cognos, which already had products that overlapped all of Adaytum’s.

You can view the full report from http://olapreport.com



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