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Brio's Acquisition of Sqribe Gives It 2-Year Edge on Rivals.

By Siobhan Kennedy

Brio Technology Inc's acquisition of Sqribe Technologies Inc will provide it with enterprise reporting technology that its main rivals, Business Objects Inc and Cognos Software Inc, would need over two years to develop, the company's president and CEO said yesterday. During a briefing with analysts in New York, Yorgen Edholm said: "Frankly, the enterprise report writer was the reason we bought them," he said, "it's the heart of Sqribe, it has a huge following in the Fortune 500 and its the only vendor that can offer such a strong, robust solution. It would take Business Objects or Cognos over two years to develop anything equivalent."

Sqribe's SQR Enterprise Report Server is widely acknowledged to be one of the most robust reporting products, drawing on data from multiple sources and distributing it to thousands of recipients at a time. Typical applications include the production of bills, invoices and checks; all heavy duty procedures that require lots of calculations and intensive, fast processing. Brio's analysis software, on the other hand, is good at letting companies take that data and query it on an ad hoc basis; produce graphs and charts and distribute them throughout the enterprise. Increasingly, Edholm said, Brio customers were telling the company they were happy with Brio's analysis tools but they felt they had no solution when it came to more detailed reporting. Similarly, Sqribe's customers were happy with their reporting capabilities but wanted more flexible OLAP tools for more detailed, point analysis. So, on the face of it, while many people thought that the merger of the two business intelligence companies was an illogical one, "historically, we've had very little overlap," Edholm concluded, "but going forward we intend to integrate the products so that our customers only have to talk to one salesperson for all their business intelligence needs."

Edholm used the meeting to outline product integration plans. By the end of this summer, he says the companies will have integrated Brio's Enterprise 6.0 suite with Sqribe's ReportMart enterprise portal, as well as enabling Brio data to be accessed and incorporated in Sqribe SQR reports. This time next year, they will have a common server and metadata infrastructure, as well as providing what Brio calls a common "producer experience," which basically means that the same IT person could potentially develop both Brio and Sqribe-based reports and queries. Twelve to eighteen months from now, the companies expect to start introducing new products, including a push into the consumer space, with new thin client offerings to enable for example home- users, to carry out more analysis of their financial status over the web; a market which Edholm described as "explosive." The products will either be sold via third parties, such as a bank, or Brio is considering offering these types of consumer services as an outsourced solution, he said. At the same time, the company will introduce more advanced analytics and data visualization options to add to the existing product suites. It will also work with recently-acquired MerlinSoft Inc to develop horizontal and vertical applications. The first, to be announced some time next quarter, will be an off-the-shelf sales application but others will be added in time.

On the company integration side, Edholm said that cross selling had already begun, although he doesn't expect revenues to show until Brio reports its second quarter later this year, as the acquisition isn't due to close until the beginning of July. Cross training for the US sales forces was completed this week and training for the European side is still ongoing but expected to finish soon. The aim, said Edholm, is to get one salesperson selling the whole product line with specialists in different fields. General and administrative and marketing teams have also been combined. "The only thing left is to get the product development teams together, but on everything else we're at least one month ahead of schedule," Edhol said.

Brio, which reported net profits of $0.83m in its fourth quarter, which ended April 21, said the target operating income of the joint venture will be around 10% to 15% of revenues. At present, Brio makes 83% of its sales in North America, with the rest from international sales, while the aim for the combined company is 70% to 30% respectively. Brio currently makes around 74% of its revenues from license sales, the rest coming from services. With Sqribe on board, it hopes to push services revenues to 35%, something which the company's CFO, Karen Willem predicts should be easy to do given Sqribe's existing customer base of 7,500 users, compared to Brio's 4,000.

Although Edholm claimed the acquisition of Sqribe makes the combined venture a one-stop shop for all a company's business intelligence needs, it still lacks any ETL (extraction, transformation and loading) solution of its own. ETL tools are the means by which companies extract information from multiple sources, clean it and load it into a data warehouse for analysis. Although Brio's UK marketing manager previously told ComputerWire, a company like Informatica would neatly fill that space, Edholm yesterday denied Brio was on the acquisition path, saying that there were lots of ETL vendors out there but Brio didn't feel the need to buy any of them at present.
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Publication:Computergram International
Geographic Code:1USA
Date:May 11, 1999
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