Business Objects has a solid quarter

The quarterly results of Business Objects reflect the generally fairly robust health of the business intelligence sector, displayed by several other vendors in recent months. Revenues in Q2 2007 were USD 350 million, and profits were up 26% on last year. License revenue, always a key measure for a software company, was up 19% (ignoring currency variations) which is a strong positive sign. On the downside, the large deals appear to drying up, with just six deals over USD 1 million, half that of the same quarter last year. On the other hand there were 154 deals between USD 200k and USD 1 million, which is up 36%. This suggests that customers are phasing things more gradually, and also points to the tendency towards saturation of the BI tools market that I have written of previously. There are likley to be fewer and fewer giant deals to go around, as most companies that want to make an enterprise purchase have already done so.

With USD 1 billion in cash lying around Business Objects also has plenty of ammunition for further acquisitions should it decide to do so. This has been a smart strategy in my view, with acquisitions such as Cartesis having diversified Business Objects from the pure BI tools market, which seems to me to be one with limited growth potential and vulnerable to price pressure form Microsoft. Going “up market” is the way to go here.