Business Objects Case Study at Plug and Play Tech Center

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    Business Objects Case Study at Plug and Play Tech Center - Presentation Transcript

    1. Business Objects Case Study Dave Kellogg Plug and Play Tech Center Collaboration Track (PACT) Event Revision 1.2 10/10/08
    2. Disclaimer
      • Facts / data are from memory and approximate
      • Facts presented are to illustrate the lessons learned
      • The lessons learned represent my opinion
      • Intended audience
        • Group of international entrepreneurs and venture capitalists
    3. Business Objects Basics
      • VC-backed, French startup
        • Investors included: Discovery Ventures, Atlas Ventures, Innovacom
      • Founded by two 27-year-olds from Oracle France in 1990
        • 3 rd -party inventor submitted concept to Oracle France
        • Idea was shot down on the corporate ladder
        • They decided to found company to commercialize the idea
      • Category: business intelligence software
        • Query and reporting, later added analysis, dashboarding, planning
      • Sold to SAP for $6.8B in October, 2007
      • Me
        • Ran marketing in various forms from 1995 to 2004 ($30M to $850M)
        • Based in both Paris and San Jose
        • Currently CEO of Mark Logic, leading provider of XML servers
          • Specialized DBMS for managing XML
          • Documents, unstructured, and semi-structured data
          • Filling a void between relational databases and search engines
    4. Co-Founders
      • Bernard Liautaud, CEO
      • Denis Payre, COO
      • Partners
        • Shared office, joint photos and interviews, et cetera
        • Worked successfully, in a stormy way, for 6 years
        • Pro: healthy tension improves ideas
        • Con: too much conflict can paralyze
      • Lessons learned
        • There is usually a greater and a lesser equal
          • Think: Simon and Garfunkel
        • The more this is understood by both, the better
        • CEO job changes much less than COO job as a company grows
    5. Frugality / Profitability
      • About half the company was sold for ~$5M
      • Why so low a valuation?
        • Inexperienced founders (27 year old founders less hip then than today)
        • Paris location (outside the mainstream)
        • IP licensed with royalties (some IP risk; later renegotiated)
        • Overall perceived low odds of success
      • 100:1 returns for original VCs
        • In cases, the best investment they ever made
      • The good news was this drove a culture of frugality from day one
        • Build your own desk
        • Profitability and cash generation a must item
        • In software: profitability is a decision
    6. Targeting the US Market
      • Software is not like baseball
        • Do not attempt to work your way up thru the minor leagues
        • Do not say “let’s take France first and then expand”
        • No one outside France will care that you own France
      • Business Objects understood this from inception
        • Focused on USA from early on
        • Eventually moved headquarters to the USA after repeated troubles
      • Lessons learned
        • To be a real player, you must be a leader in the leading market
        • Consider relocating all / part of your non-US-based company
        • I never appreciated Silicon Valley so much as when I moved to Paris
    7. Empowerment / Decentralization
      • The CEO was never afraid to hire those senior to himself in terms of experience
        • Most people say they aren’t, but behave otherwise
        • Deep experience at board, field, and corporate level
      • French headquarters drove decision to use country model
        • No “worldwide VP of sales”
        • Empowered general managers running P&Ls in countries
      • Benefits / lessons learned
        • Empowerment: run your own (distribution) business
        • Experimentation and benchmarking: comparability
        • Frugality / profitability: N people have P&Ls, not 1
    8. Near-Death Experiences
      • Two software development projects nearly killed the company
        • BusinessObjects 4.0 (1996)
        • Tosca / Cadenza (1999 – 2002)
      • One was launched into the market (Business Objects 4.0)
        • “ I thought my motherboard was broken” – anonymous customer
        • Result: grow deceleration, stock price drop 90%
      • One never made it out (Tosca / Cadenza)
        • Result: forced hand to buy Crystal Decisions for $1B
        • Overall the acquisition was a very good thing
        • Benefits beyond product line completion (e.g., market share leadership)
      • Lessons
        • Success leads to arrogance and arrogance to failure: watch the degree of ambition in your development plans
        • Where you develop matters: system vs. application software
        • Use agile methods and avoid waterfall nightmares
        • Choose code names carefully (Tosca is a tragedy) :-)
    9. Product Excellence
      • It is possible to carve niches off major players with focus
        • BusinessObjects, WebIntelligence, Crystal Reports
        • Best-of-breed in category
      • Oracle had every advantage
        • Discoverer and other BI products
      • Oracle’s products were not best-in-class
        • Nor did they interoperate well outside the Oracle world
      • Lessons
        • Focus enables competitive advantage
        • Customer intimacy / product excellence matters: not everything is a commodity
        • Structural advantage: use not-being-Oracle as an advantage against Oracle

    + Dave KelloggDave Kellogg, 2 years ago

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