New Products and Strategy for Business Objects as Migrations Lag

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By Ken North

Sustaining revenue growth is a challenge if a company is in the position of Business Objects, with customers declining to migrate to its flagship product. Business Objects’ response to the challenge has been encouraging more customer migrations, while moving into new markets, such as software as a service (SaaS).

Business Objects has been on a roll recently and it's become a darling of industry media and analysts. Senior VP Janet Wood was recognized as one of the industry’s top executives by VARBusiness and the company was named one of the dozen leading technology firms by Intelligent Enterprise. Forrester Research cited Business Objects as the top BI vendor in the February 2006 Forrester Wave report. Gartner Research recently placed Business Objects in the Leader Quadrant in the recently-published Gartner Data Quality Tools Magic Quadrant.

Business Objects recently unveiled products and a strategy intended to help sustain its revenue growth of recent years. In April 2006, the company reported first quarter revenues increased over 2005, a year when Business Objects' annual revenue first achieved the $1 billion milestone. Business Objects global service organization provides consulting and education, with services generating 52% of the company’s income. The other 48% comes from licensing software.

For FY 2005 Business Objects total revenues increased to $1.077 billion, a 16% increase over 2004. Software license revenues in 2005 increased to $515.6 million. The license revenues included $234 million from Business Objects XI, the company’s flagship business intelligence (BI) product.

The launch of Business Objects XI occurred in January 2005, with release 2 following in November 2005. The company markets Business Objects XI to the enterprise market. For the small– and mid-sized business market, the company offers the Crystal line of software. That product line is derived from software acquired by the purchase of Crystal Decisions in 2003.

In April 2006, Business Objects reported first quarter 2006 revenues were up 12 percent over the same quarter in 2005. The revenue figures reported for 2005 and 2006 are impressive because customers have been slow to migrate to BusinessObjects XI.

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