Business Objects’ fiscal 2nd quarter results were announced on 26th. Overall sales ($294 Million) grew 12 percent comparing to for the second quarter of the prior fiscal year and multi licensing sales of $123 million declined just one percent but sales related to service contracts rose 25 percent with $171 Million.

However, the financial analysts indicated negative opinions with the BO’s results. In converse to the BO’s enthusiastic report the analysts said, “BO’s results did not satisfied growth rate forecasted to the investors previously” Further, unlike the BO’s optimistic forecast to BI(Business Intelligence) market, the analysts were pessimistic due to the saturation in the market with reaching its peak already. The analysts had BI market drawing ‘Cognos’ in their mind with the less than expected performance analogy.

The analysts report might had direct immediate effect on the BO’s falling stock prices with not much hope in sight.

In response to the negative analysis, BO’s CEO John Schwartz explicated the situation with the current BI market condition.

CEO John Schwartz revealed his take with the 2nd Qtr. results and future forecast of the market in his private conference with ZDNet Korea
(Just before the beginning of the conference, media director Randy Cares (San Jose, California) delivered news of 14% rally of BO’s stock to $23 per share.

CEO John Schwartz, “The 2nd qtr. results have shown 12% overall growth with larger market shares and happy with sales figure of $294 Mil. There are some good and bad with the results but 36 percent growth in North American market is a welcome sign and has helped EPM, EIM sales also.”

However, he also said with less than expected results, its looking to further improve the corporate goals and better action plans. In addition with the results of last 2nd qtr and having $475 Mil in cash, will find the better investment opportunities and related corporate take over opportunities also.


Following is a Q & A session with CEO John Schwartz

The analysts are less optimistic about mid to long-term outlook of the BI market with the BO’s latest results.
I do not agree. BI market is not saturated at all. According to market reports from IDC, the growth rate of the BI market is 3 to 4 times that of IT markets with annual average of 11 percent. It’s a progress in work. Our XI platform will surely widen the opportunities in the BI sector and bring new experiences to the customers.

Reason for slump in Asia and Europe?
Pacific Asian territory includes Australia, Japan, India, South Korea and Hong Kong. In exception to advanced markets in Japan and Australia, South Korea, India and China is growing at accelerated rate.

Markets that previously grown show slump with fast growth in other markets indicate possibility of instability in future markets isn’t it?
Overall portion of growth rate in Asian market is mere 5 percent of the US’. This is an indication that maturity takes much longer period. What’s more, 36 percent growths in US also reflect performance reliability and expanded scale of BI market.

Is there a failsafe plan to satisfy both investors and customers?
Yes. The last fiscal quarter is just a temporary situation and third and fourth quarters should show rebound, it is our plan. There are vast opportunities out there. The market should continue to grow with 12 percent growth rate and at lest 35 percent gap between second place market competitor with products like EPM and EIM with effective investment choices just like North American regions will aid in continued growth. We will also continue to look into corporate restructures and takeovers.

Besides the BI market any other investment plans?
No! Not at present moment. With scale of $230 million and BO’s 14 percent market shares combined with annual growth rate of 11 percent, we will concentrate in BI market exclusively.

How will you compete with poor market conditions?
It is true companies like SAP, IBM, Oracle and MS are in direct competitions with more strategies. However, none of these companies provides a reliable solution like BO is currently providing to the customers and they are only providing 10 to 15 percent solutions only. We know that customers prefer BO and our competitors have a long way to go before catching us. That is why I’m pretty confident with our position in the future.

Your active responses and PR to sub par performance of one quarter is not an indication of corporate takeovers?
The market demands an exclusive one on one service provider and not on multi company level. Further, we are financially solid and are top leader in the market so there is no need for any corporate takeovers.

What are the Investment plans in South Korea?
We know it’s an important part of the market. We will be able to invest to support fast-paced growth. I cannot tell you a specific amount since I’m not in finances but knowing that Korea has huge possibilities we will continue investing. Announcing branch manger here also is the part of that. @