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SAP Plans to 'Tuck' Pilot Software into Analytical Apps

Friday, February 23, 2007
SAP Plans to 'Tuck' Pilot Software into Analytical Apps

By John Pallatto

Seeking to bolster the performance management capabilities of its analytic applications, SAP on Feb. 20 announced that it has acquired privately held Pilot Software of Mountain View, Calif.

Pilot Software has a 20-year history in the development of business analytics and online analytical processing. It specializes in developing applications that enable C-level executives to set their business strategies and goals so they can manage their businesses to meet the goals.

This is a process that is done at most companies "by people sending spreadsheets back and forth along with PowerPoints and e-mails without an analytic application" that can bring order and insight to the process, said Sanjay Poonen, SAP senior vice president and general manager of analytics.

SAP decided to acquire Pilot because "we saw something innovative" in Pilot's technology that leapfrogs competing applications in the market, Poonen said. He described the Pilot deal as a "tuck-in" acquisition that is relatively small and can be readily integrated with SAP's existing product line. SAP didn't disclose the terms of the acquisition.

The pilot acquisition is similar in scale to its June 2005 acquisition of manufacturing software maker Lighthammer and its April 2006 acquisition of enterprise risk management software producer Virsa, Poonen said.

Poonen contrasted SAP's acquisition strategy with the kind of strategy that has been followed for the past four years by Oracle with its multibillion-dollar buyouts of its Enterprise Resource Planning software competitors PeopleSoft, J.D. Edwards and Siebel Software.


"We're not looking for the big, huge acquisition," that results in "complete disruption to our customers because they are having to pick from three or four or five different platforms," Poonen said.

Companies like Virsa and Lighthammer "have all succeeded very well inside SAP because they provide the least disruption to our customers. But they also find a way to get innovative products into the system," he said.

Poonen said SAP has already begun the process of integrating Pilot software with its NetWeaver application server platform "so that SAP customers get all the benefits of tight integration with NetWeaver."

SAP is acquiring Pilot as a separate business unit under its CEO, Jonathan Becher, who will report to Poonen.


"Everyone on the team is staying on board," Poonen said. "Many of the development team have had a long history in this space," as much as 15 to 20 in developing business intelligence, business analytics and OLAP applications, he said.

The acquisition, Poonen said, will also provide a larger, global distribution channel for Pilot Software, which had about 150 customers worldwide, according to SAP officials.

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