Partners Wary As Business Objects Expands Services Business

Some solution providers said they welcome the opportunities to partner with Business Objects on projects, yet others complain that the software company is encroaching on their turf.

"We want to form a more trusted-adviser relationship with our clients, and as we expand our relationships with our clients, we're looking to expand the duration of our projects," said Clement Kichuk, Business Objects' director of global services marketing.

Business Objects, with headquarters in Paris and San Jose, Calif., has increased its Global Services staff to about 700 employees, up from 658 at the end of last year. Professional services sales totaled $48 million in the company's most recent quarter, a 30 percent year-over-year gain.

Several solution providers said Business Objects is sending the message that it's staking out the enterprise market as its own for direct engagement and wants channel partners to concentrate on the small- and midsize-business space.

"It makes sense strategically for them. You want to push your partners into the lower-margin, higher-overhead areas," said Bill Dunn, CEO of Dunn Solutions Group, a Business Objects Gold partner in Skokie, Ill. "We've been expanding into SMB, but we also do quite a bit of enterprise work. And we're not going to stop doing that."

Dunn said that overall he's happy with his relationship with Business Objects and his business around the vendor's products has been strong lately. Still, he added, Business Objects could do more to embrace partner participation in enterprise accounts.

Another Business Objects Gold partner had a darker view of the vendor's growing services push. At a meeting last month between Business Objects and its top partners, "the No. 1 issue was the amount of margin partners are getting on enterprise accounts, and right behind it was the services issue," said the partner, who requested anonymity.

Business Objects' Global Services overhaul is part of broader organizational changes. The company appointed a new CEO, John Schwarz, in November and named a new Global Services head, Mark Doll, in January.

Doll, formerly a partner at Ernst & Young, is spearheading a revamp aimed at standardizing Global Services' worldwide offerings and systematizing the business. A new "Business Intelligence Solution Accelerator" methodology defines practices for project management and deliverables, and a new Six Sigma framework is being used to measure services quality.

"We're trying to operationalize this target of being a really good vendor to work with," Kichuk said. Five practice areas -- education, product, platform, data and decision services -- guide how the company structures its services engagements.