Business Objects

I've been reading Michael Cusumano's The Business of Software and encountered this anecdote re: the beginnings of Business Objects. The founders, Bernard Liautaud and Denis Payre had both worked for Oracle France in sales and marketing. They were approached in the late 80s by an engineer and consultant named Jean-Michel Cambot with a concept for a decision-support tool. His software made it possible to generate SQL statements from a simple user interface, without the user having to know SQL. He had approached Oracle to productize and distribute his prototype, but they had declined. Liautaud and Payre bought the software from Cambot and founded Business Objects in 1990.

From the beginning, Business Objects went after a big “horizontal niche” rather than a “vertical” market. It attempted to “cross the chasm”… by riding on the backs of Oracle customers… The company was not trying to create a new platform to work with all database technologies, but rather was positioning itself as a “complement” to Oracle.

Interesting market entry strategy for several reasons: (1) horizontal rather than vertical strategy, (2) leverage the large installed base of a big successful company and sidestep the Early Adopters and the Chasm, (3) by creating a complementary offering, you get to work with BigCo’s salespeople, help them win more deals, make their product work better, etc., (4) since the product is complementary and improves the performance of the established product, this opens up the possibility of an acquisition down the line. Another example of this strategy would be PayPal and eBay.