Cognos and IBM to pull it together
COMPUTER NEWS MIDDLE EAST  -  Monday, December 31 2007

After what he terms as a consolidation wave, Ad Voogt, Cognos EMEA President says the company’s take over by IBM is will offer major benefits for customers. The industry’s natural need for information and Cognos’ value offering drove the merger, Voogt adds.

Ad Voogt, President for Europe, the Middle East and Africa, Cognos
Following IBM’s agreement to buy the business intelligence software vendor Cognos for $5 b in cash, the technology major is expected to accelerate the delivery of BI beyond the traditional user.

To many in the industry, the move into BI applications marks a new strategy for IBM, which has long avoided competing with partners in the application market. So what’s the strategy behind the move?

The major software companies -- through their acquisitions -- are empowering customers to extract BI from these applications, and use that to drive smart decisions.

“The industry has seen consolidation for two major reasons – taking competition out of the market and to accelerate growth. With virtually no overlap of products between Cognos and IBM, this acquisition will become the fifth key segment – BI and Performance Management for IBM,” says Voogt. Cognos is also the 23rd company IBM has bought in pursuit of its "information on demand" strategy, launched in February 2006, according to an IBM statement. IBM intends to integrate Cognos into its Information Management Software division when the deal closes

The play for the BI market is currently split between transactional software vendors and specific business optimization software players (Performance Management and BI players focused on culling intelligence from operational systems). However, recent acquisitions have brought the two together more closely.

“IBM as a company has technology that is open to all types of data sources and it has always had a significant partner strategy. None of the BI vendors have a platform that is service oriented (SOA enabled) as we have. Although IBM and Cogos have no product overlap, there is a clear fit, the benefit being quick integration of the business to offer value to the customer,” he adds.

Although BI acceptance across industry segments has been gaining, companies are still struggling to translate strategy into execution, an area that Cognos says it can help deliver on.

“What we are seeing is that there is a growing natural need for information. In the first stage, the focus is more on basic reporting and analysing historic information. The second, more important phase is the move to modeling, planning and forecasting. Bridging the gap between the past and future is score-carding and dashboards,” Voogt shares.

The endpoint, according to Voogt, is to equip organisations and management with full collaboration capabilities to manage their organisations from a performance point of view.

Where have all the players gone?

Less than a year ago, the business intelligence (BI) market was the turf of several powerful, pure play vendors.

Up until 2006, according to research from analyst firm IDC, around 48% of the BI marketshare was divvied up among the top five players -- SAS Institute, Business Objects, Cognos, Hyperion and Microsoft. Fifteen other "second-tier" vendors controlled another 30%. In 2007, all that changed...dramatically following three key acquisition announcements.

In March ‘07, Oracle announced plans to acquire Hyperion for $3.3 billion. In October ’07, SAP announced it was forking out $6.8 b to buy Business Objects, and only recently, IBM gave notice of its intention to snap up Cognos.

What does this mean for the users of BI software? Some customers of acquired BI companies say a "wait and see" attitude is the only one they can adopt right now. But there are also those -- like Joel Martin, VP of enterprise software research at IDC -- who predict the impact of the acquisitions will