AI Analyzes Infor’s Intent to Acquire Birst, A Cloud BI Trailblazer

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On April 25th, enterprise application company Infor announced that it planned to acquire Birst, one of the leaders in the standalone Cloud BI world. Birst is expected to remain as a standalone solution and Infor will become Birst’s largest ISV as Birst becomes the analytic back-end for Infor-based applications. Amalgam Insights (AI) finds this to be interesting based on our long history of analyzing Birst.

Birst has been a company that AI investigators have tracked for almost a decade as it has always been one of the trailblazers and market leaders in the standalone Cloud BI world. Having spoken at BIRST FORWARD in 2013 and having worked with a number of Birst consultants and users, I’ve seen first-hand how Birst has consistently been a strong BI solution in terms of providing triple-digit ROI with rapid implementation and the “agility” that has become a BI expectation in linking new data to enterprise-grade analytics.

Over the years, Birst has excelled as a cloud-native BI platform that provided data blending and prep, ETL, reporting, dashboards, data discovery, and discovery. The platform was developed by BI experts including founders Brad Peters and Paul Staelin as well as Southard Jones, all of whom had previously been at Siebel Systems. With a strong team, strong product, and a time-to-market advantage, Birst was one of the first true enterprise cloud BI solutions that credibly met business expectations for full-service BI, including embedded BI and complex integrations. As a result, it is no surprise that Infor would be interested in having a full-fledged cloud BI solution under its belt to support the industry enterprise applications and strong user experience capabilities that Infor brings to market.

There is some overlap between Infor’s existing BI solution, Infor BI and Birst in that Infor already has a reporting, dashboarding, and business planning solution built on a in-memory OLAP database. AI believes that the biggest problem that Birst solves for Infor is to provide rapid data integration to bring external data into existing Vault and Infor data stores.

As a result, this looks like an integration play and a potential enabler both for 2-tier ERP and accelerated data-driven app development. Both of these capabilities should be helpful to Infor as it continues to position itself as an alternative to SAP and Oracle.

It is not a great sign that the acquisition cost is not being provided. Both Fortune and ZDNet stated that the acquisition was in the $100 million range. This price is well within Infor’s budget and comes out of the Koch Brothers’recent $2 billion+ investment in Infor. However, this rumored purchase price would be less than the $156 million in funding that Birst has publicly announced from a public perspective:

Although not a great exit for Birst investors, the capabilities that Birst provides as a “networked BI” provider that can quickly connect standalone data sources with an enterprise data environments are still intact.

AI believes that Birst’s more recent focus on BI delivery, governance, and application development positioned Birst as an IT-focused solution at a time when the importance of BI was increasingly shifting to the line of business. Although this positioning may have been aimed at getting large enterprise-grade deals, it also fought against the ability that IBM, SAP, Oracle, Microsoft, Microstrategy, and other heavyweights had to significantly discount their cloud products as part of a larger enterprise deal or as part of a hybrid BI strategy. Without the alternative revenue stream, Birst likely was challenged to grow at investors’ expectations even while having a product that fit into existing market requests for agility

In addition, the market for core BI capabilities is quickly commoditizing with the emergence of solutions such as Microsoft Power BI, Amazon Quicksight, and TIBCO Jaspersoft, all of which drove down the price expectations that businesses had down to $10 per user or 55 cents per hour in the case of TIBCO Jaspersoft. Although Birst also provided agile ETL, ease of embedded BI, and strong guided analytics, it was difficult for Birst to fight this combination of pricing and functionality expectations as a standalone vendor.

In this light, AI believes that this acquisition is a positive sign for Birst in that it now can also be potentially bundled with Infor and be on even ground with the megavendors that it has previously competed with and tried to work around with a “Networked BI” strategy. The networked and connected BI story still exists for Birst as a standalone BI provider, but now it can be bundled with Infor’s vertical and functional market knowledge to create custom apps and take full advantage of Infor’s platform.

Here are AI’s recommendations based on Infor’s recent acquisition of Birst.

For current and potential Infor customers: Consider Infor’s acquisition as a strength in both futureproofing Infor’s BI capabilities and to bring in third-party data. In the past, AI has found that Birst is easier to support than Infor but also believes that Birst and Infor BI can be used in conjunction as Birst can provide rapid ETL integration capabilities for Infor’s Hook and Loop design.

The real value will be in accelerating Infor’s ability to bring third-party data into customized applications and to synchronize multiple instances of ERP or other enterprise applications. Birst has always been a strong “knitting” tool for BI and AI believes that this will only continue based on Birst’s strong team of experienced analytics and BI developers and product managers.

For BI vendors currently considering Birst: Expect Birst to remain standalone for the short and medium term, perhaps with an influx of cash from that Koch Equity investment and some additional deployment or consultant resources from Infor. Birst still provides a strong product for embedded BI and for agile integration and AI believes that as long as Infor is invested in the Birst team and provides incentives based on the continued growth of the product, that the Birst product will continue to be a premier option for Cloud BI.

For Infor competitors: Expect Infor to throw in Birst for larger enterprise deals in the future. Now that the exact revenue contribution of Birst is less important than the total enterprise deal size, Infor can afford to play the same big picture enterprise sales game with a top-tier cloud BI product. Infor-based counterpositioning continues to become more nuanced as Infor closes the gap between itself and SAP/Oracle.

It is an interesting time in the Cloud BI market now that first-generation pure play Birst has exited the market. AI believes that Infor got a steal if it effectively aligns its business consulting and services with Birst’s continued excellence in embedded and networked BI.

Additional Coverage from other analysts and influencers:

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