German software giant SAP has announced plans to acquire business intelligence (BI) solutions vendor Business Objects, at a cost of 4.8bn Euros. This is SAP’s largest acquisition yet and follows Oracle’s recent purchase of Hyperion, another large player in the BI space.

Henning Kagermann, chief executive of SAP, highlighted the importance for the enterprise apps giant to continue to grow organically and continue making minor acquisitions. However, he added that the purchase of Business Objects was an exception because of its crucial leadership in the BI market.

Andreas Bitterer, research vice-president at analyst Gartner, said whereas Oracle had experience in acquiring billion-dollar companies, SAP has only bought small companies and needed to demonstrate “it can do it”.

Alys Woodward, a programme manager at research firm IDC, said it would have been tough for SAP to develop its own BI solution as this would require a closer understanding of the end user. She explained that this contrasts to the type of understanding that is needed for application solutions and is something that SAP has struggled with.

Woodward added that the SAP move into BI has been predicted for a while with “every business intelligence vendor wanting to be in on SAP deals”.

However, Bitterer said that the Business Objects purchase could not have been on the agenda long-term because then the BI specialist would not just have bought Fuzzy Informatik, a data quality expert, to penetrate the German speaking market. Likewise SAP is unlikely to have entered into an OEM agreement with Informatica Corporation, a leading provider of data integration software, he added.