Behind Business Objects' Mid Market Dreams

’Business Intelligence (BI) isn’t just for large enterprises’ is the new mantra for Business Objects (BO). The BI vendor has been putting in a lot of effort to lure mid-market and smaller enterprise customers with a slew of offerings and marketing initiatives.

In its latest move, the company released a “plug and play” type BI appliance called Business Objects Crystal Decisions, tailored specifically for the mid-market businesses. The company also established a dedicated mid-market business unit with marketing and sales teams to tap opportunities in the space. The vendor is also taking steps to better its partner ecosystem and strengthen its reseller network to help it penetrate the mid-market space.

In light of all these activities, one can’t help but wonder as to why BO is going after the mid-market so aggressively.

Why Mid-Market?

“BI is for all organisations, big and small,” said V R Srivatsan, regional vice president, South Asia, Business Objects.

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Over the last few years, there has been a considerable rise in BI software adoption levels among small and mid-sized companies. One of the primary drivers behind the trend is the competitive nature of modern business environment. Companies, especially smaller ones realise that they need to move fast and make quick and accurate business decisions in order to gain an edge over their peers and BI tools provide them with that ability.

“This trend presents tremendous opportunities for us as vendors. It is for these reasons, we’re concentrating greatly to tap into the mid-market segment,” informed Srivatsan.

Higher Numbers

Increasingly, BI is becoming a mainstream technology for a large number of small-time organisations. Estimates suggest that the mid-market companies buy $2.1 billion worth of BI software each year, a figure that is growing at 12.5% per year. This is almost 50% higher than the growth rate witnessed across large enterprises.

A majority of large BI vendors including BO haven’t really paid much attention to the mid-market segment in the past mainly because smaller deployments weren’t as lucrative from the dollar perspective. However, these figures are beginning to change that outlook.

“Traditionally, we’ve concentrated on the tier-I class organisations, however given some of the recent developments in the mid-market space, we believe that it is going to be just as rewarding as the former for us from a vendor stand point,” told Srivatsan.

Before Microsoft Takes It All

One of the main reasons for BO’s recent mid-market rush could be Microsoft’s BI ambitions. With its upcoming Microsoft Office PerformancePoint Server 2007 slated to be released in the next few months, Microsoft has already started to claim its share of the overall BI mid-market pie. It therefore becomes even more important for companies such as BO and other pure play BI vendors to establish themselves before Microsoft enters the fray.

In a recent interview, John Hagerty, senior analyst at AMR Research was heard saying, “When Microsoft puts its attention on a certain marketplace, chances are that they will get a large stake in it. Hence, it is important for vendors of all stripes to be able to establish a strong position in the mid-market before Microsoft comes in and tries to take it away from them.”

A New Approach

When it comes to BI, the needs of mid-market companies vary drastically from that of larger companies. Such companies prefer pre-packaged offerings that do not require extensive customisation or lengthy implementation cycle. Also, because these companies do not have huge IT resources at their disposal, they usually go for systems that are simple and easily manageable.

Earlier, companies like BO would either try to simply pass off their offerings as tailored for mid-market or would present scaled down versions of high-end products to customers. But that didn’t do the trick.

“In the past, Business Objects has just “slapped a mid-market label” on its existing enterprise software. But it doesn’t really work that way. Therefore, we now as a company will be taking different elements of our enterprise products and only selecting those that the mid-market really needs to have,” said Todd Rowe, vice president and general manager of the new Business Objects mid-market business unit.