These are challenging times for Bernard Liautaud. After engineering the acquisition of reporting vendor Crystal Decisions, Business Objects has emerged as the leading supplier of business-intelligence (BI) software. That's the good news. The flip side is that Business Objects is in a tight battle with another market leader--Cognos. Integrating Crystal Decisions has proved challenging over the short term, though Wall Street analysts remain bullish about the company. After turning its back on partners, the company is now working to make amends. In an interview with VARBusiness senior editor Jeffrey Schwartz, Liautaud discusses his goals to make partners central to the company's expansion.
VB: How do you see the BI market shaking out over the next couple of years?
Liautaud: I think the market is experiencing a lot of growth, and it's going to continue in the years ahead of us. What's happening is the movement toward business intelligence. It's a natural evolution of the applications market. Companies have put databases in place, and afterward they put in ERP to automate their business processes, and now it's all about managing and improving their performance through information--extracting the data that is being collected by the application into a database. Business intelligence is the natural next step.
Because the industry is moving, what we're seeing is a natural consolidation happening. As a result, we're in a phase where the leaders are emerging. We have taken a very important step toward being the leader by combining with Crystal. Last year, we were $840 million in size, growing and profitable, and having a broad portfolio that covers all of the different aspects of BI--the data integration, enterprise reporting, ad-hoc query and analysis, analytic applications and, of course, one of the most important developments in BI: enterprise performance-management tools--dashboards, scorecards, metrics and so on.
VB: From that standpoint, how critical is Crystal in putting that road map together?
Liautaud: Crystal was critical in giving us the enterprise-reporting capabilities. They don't provide a huge amount of value in the [enterprise performance management] part. But in deploying data, information to large amounts of users is an absolutely critical piece. They have a very scalable architecture, they have a reporting engine that is the best in the industry, and they also have an incredible presence. It's embedded into SAP, Microsoft, PeopleSoft, BEA--it's everywhere.
VB: How has your partner base shifted since the merger?
Liautaud: I think we've done a good job at maintaining the base. We have OEMs and VARs, and it has been a very important piece of the Crystal business and Business Objects.
VB: Are you looking to shift more of your business from direct to indirect?
Liautaud: I think 40 to 60; we're quite comfortable with that mix. We're not looking at shifting the mix.
VB: Are you looking at bringing in new partners?
Liautaud: We would like to expand the base. We have a good set of partners. It could definitely be expanded--the market is not very well-covered and not very well-penetrated. We have only covered about 15 to 20 percent of the market. [The way] to penetrate more is through a larger set of partners. It's not a switch, but more of an extension. We feel there are going to be more and more companies developing applications and they [will] want to embed BI components. We want to be their partner of choice.
VB: Where is the real opportunity for the indirect channel? Gartner is saying BI will follow the same model as ERP did in terms of how the market would grow, yet some argue companies like SAP have not necessarily been the most channel-focused historically. How do you see BI differing from a channel perspective?
Liautaud: I think the big difference is that ERP vendors were not well-adapted to the small and midsize business. SAP has historically been a very large organization. Business intelligence has always played to companies of all sizes, and there's still a huge opportunity in midsize businesses, where direct reach is never enough. The VAR has a gigantic opportunity in the SMB [space], working with Business Objects. You don't need to trim down the products to make them great for the SMB market. And now the SMB market is waking up to BI, so that's where the opportunity is.