No objections to Business Objects results

Business Objects delivered a very solid Q4, with revenue of USD 371M up 22% from a year previously. The good news is that the increase was mainly due to license revenue, at USD 180M up 16%. The operating margin of 23.6% was the best the company has ever achieved.

The only small cloud on the horizon was that the core BI business was actually in decline in license terms. The EIM revenue was USD 23M (well done to the First Logic boys and girls), USD 30M in enterprise perfromance management, and USD 127M (down 4% year over year) in the core BI products. This apparently paradoxical result is in line with my long-standing thesis about the saturation of the BI tools market in enterprises.

There were 13 deals in excess of USD 1M (up from nine last quarter), and overall in 2006 there were 35 deals of this size, which is actually down form 46 last year. Overall growth in Q4 was geographically well spread, with Europe up 25%, Asia Pacific 26% and the Americas 19%. The results reflect some wise acqusitions, since without the EIM/First Logic revenue, and the EPM revenue (based around the acquired SRC software and to a lesser exent the ALG acqusition) things would not look so rosy. Still, this vindicates the strategy of trying to move up the food chain in BI beyond core reporting, so credit where credit is due.