In-Depth

Business Objects Shakes Things Up

Cognos may have snared lots of newsprint last week, but Business Objects wasn’t exactly out to lunch. The BI giant picked up a new CEO, named a CSO, and also announced a spate of new solutions for the mid-market. But what exactly does the CEO switch-up mean?

• By Stephen Swoyer
• 09/21/2005

It’s been a busy sennight for Business Objects SA. Archrival Cognos Inc. may have snared most of the headlines last week with its next-gen business intelligence (BI) suite announcement, but Business Objects wasn’t exactly a lightweight in the game-changing news department, either.

The Paris-based business intelligence giant picked up a new CEO, gained a chief strategy officer (CSO), and signaled a new aggressiveness in the mid-market business intelligence space.

Last week, Business Objects announced that company founder Bernard Liautaud had relinquished his position as CEO. Liautaud will stay on as chairman of the board and will assume the new title of chief strategy officer. His new replacement will be an outsider, Symantec Corp. veteran John Schwarz.

In the technology space, especially, CEO departures are often harbingers of—or, more frequently, reactions to—disappointing corporate performance.

In a number of cases, however, CEO departures have augured nothing of the sort. For example, Microsoft Corp. gained a Chief Software Architect when co-founder and long-time chief Bill Gates stepped down several years ago. Another prominent example is IBM Corp., which bid adieu to the architect of its e-business renaissance in late 2002, when Lou Gerstner handed off his CEO’s epaulettes to Sam Palmisano. Neither Microsoft nor IBM were beset by financial difficulty or lethargic corporate performance; and, in both cases, they have continued to perform well under their new chiefs.

There is an important difference, however.

Both Microsoft and IBM groomed their new CEO talent from within; Business Objects acquired its from without. And with few exceptions, the arrival of an external chief executive almost always portends trouble of one kind or another. Was that the case last week?

Far from it, Business Objects officials say. In a Webcast last Monday, incoming CEO Schwarz and new CSO Liautaud positioned the move as an evolutionary one—i.e., as part of Business Objects’ maturation from a competent BI player to a $1-billion-and-above BI giant.

Above all else, said incoming chief Schwarz, Business Objects is not under any kind of duress, real or imagined. Said Schwarz, while he wasn’t looking to leave Symantec, the offer from Business Objects was one he couldn’t refuse, noting that the business intelligence vendor “has just broken through a billion dollar barrier… Normally, companies look for a new CEO when something’s broken. That is not the case here. This company is doing very well.”

CSO Liautaud, for his part, says he’s long been mulling such a move. With the successful Business Objects XI platform release behind him and the 15th anniversary of Business Objects as a company, Liautaud said, the timing seemed right. “I have been thinking … about [stepping down] for months now. It’s been basically towards the end of last year I proposed to the board to evolve the organization of the company to this model,” he said. “I have taken this company to a billion dollars and now we are moving to a new phase where we want to become a multi-billion dollar business.”

The job responsibilities that Liautaud outlined for his CSO position are reminiscent of Gates’ duties as Chief Software Architect at Microsoft. “I have to focus my attention on the strategy and the long-term vision. I can’t do that and at the same time run the business. I felt it was the right time at the company to bring in a CEO, someone who would run the entire business, and someone who has the experience of a multi-billion organization.”

All of this may be true, agrees Mike Schiff, a principal with data warehousing and BI consultancy MAS Strategies, but there’s another important explanation for the company’s actions, too. Over the years, competitors have tried to exploit Business Objects’ French pedigree and French management team in their marketing efforts, in some cases positioning Business Objects as a French firm that simply did not (and, so the implication went, could not) understand the needs of American businesses. Last week’s switch-up effectively explodes that canard, argues Schiff. “The fact that they hired the [former] President of Symantec, it’s going to be really tough [for competitors] to say that they’re really a French company. It was a very smart move, and it also brings in someone who can at least claim to have the experience to manage their growth.”

Schiff also likes the six mid-market solution bundles Business Objects announced last week. These are product bundles that combine performance management, reporting, and data integration software that’s specifically tailored for mid-market customers.

The new Business Objects offerings—which include a Dashboard Bundle, Data to Dashboard Bundle, Reporting Bundle, Live Office Bundle, Query and Analysis Bundle, and Compliance Bundle—are available for configurations of 10, 25, or 50 users. “They’re after that [SMB] market; they’re serious,” Schiff concludes.