Nearly three months after closing the biggest merger in its history, SAP has set the dual challenge of integrating Business Objects' BI tools more tightly with its enterprise resource planning software, while also maintaining the independence of those tools to appeal to non-SAP customers.

The man in charge of this balancing act is John Schwarz, the former CEO of Business Objects who now heads the new BI division at SAP. Schwarz sat down with IDG News Service recently to discuss the integration plans, the future of BI, the emergence of Microsoft as a competitor, and why BI is still so hard to do. As reported separately last week, Schwarz also talked about SAP's plans to retire some overlapping products. Following is an edited transcript of the interview:

You announced your first joint offerings in January -- nine packages of SAP and Business Objects software -- but you plan much tighter integration in the future. Can you talk about those plans?

I'd be happy to, but I want to make another point first, which is that while we're integrating (Business Objects capabilities) into SAP as tightly as we can, we're giving an equal level of priority to not integrating in such a way that we can't sell outside the SAP domain. So the Oracle, IBM and Microsoft customers are just as important to us as the SAP customers.

Given that, there are some obvious things we have to do, and then some interesting things that we are doing because they'll add a lot of value. The obvious things are, we need to integrate so that customers who have SAP NetWeaver and SAP BW [SAP's data warehousing and BI platform] can use the Business Objects content seamlessly without having to build bridges or connectors. We used to link using connectors and special bridges because we didn't have access to the technology; now we can use the components that are part of the SAP SOA architecture so that we're integrating directly to those interfaces. So as it relates to access to information, there's going to be a direct link from XI -- our Business Objects platform -- to BW as it is today, but directly, natively integrated. We will integrate using NetWeaver where appropriate, without dragging NetWeaver along into an independent Business Objects installation.

We are also borrowing technology [from SAP] called Business Intelligence Accelerator, or BI Accelerator, an in-memory data management tool that was built by SAP primarily to improve the performance of access to massive data structures inside BW. We have attached to BI Accelerator our query and our search capability, we will probably also attach our OLAP client, so we'll be able to do queries or search or slicing-and-dicing of the in-memory data cube with lightning speed. Ultimately, I'd like to use the technology outside of the SAP BW context as well, so we'll have the ability to do in-memory analytics everywhere, so that's a very exciting development on the BI side.

What will that mean for the non-SAP customers?

Obviously, the value of BI Accelerator is performance, it's having access to large volumes of data quickly, so if you take a look at a typical data warehouse at a large company, they'll have billions of rows of information, often with many hundreds of columns of data in each row. When you start to do global search or start building reports that have to read all that data, the performance starts to be a significant barrier. So the more we can do to make access to that information really instant, the more the data becomes useful.

We are also working in the data integration area to share componentry in the Master Data Management solution. So SAP has a Master Data Management solution that's currently built primarily to underpin the collection and migration of data into the SAP processes, but we'd like to use it as a way to manage all of the data in the enterprise, whether it's SAP or non-SAP.