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IBM to Buy Cognos: Good News All Around | Intelligent Enterprise Blog
Cindi Howson's BI Scorecard
Cindi Howson is the founder of BIScorecard, a Web site for in-depth BI product reviews. She has been using, implementing and evaluating business intelligence tools for more than 15 years. She is the author of Successful Business Intelligence: Secrets to Making BI a Killer App and Business Objects XI R2: The Complete Reference. She teaches for The Datawarehousing Institute (TDWI) and is a frequent speaker at industry events.
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IBM to Buy Cognos: Good News All Around

Posted by Cindi Howson
Monday, November 12, 2007
2:30 PM

And then there were none... as in, no major pure-play BI/Performance Management vendors nor BI-agnostic database vendors following IBM's announcement to acquire Cognos.

The acquisition came as little surprise with many industry watchers speculating already last year that IBM would acquire Cognos. In a conference call this morning, neither Cognos nor IBM executives, however, would say the timing of the acquisition had anything to do with the recent SAP-Business Objects deal, or Oracle-Hyperion, or Microsoft's release of Performance Point (is there an elephant in the room?). Instead, Steve Mills, vice president of IBM’s Software Group, said the timing centered on IBM's ability to execute such a sizable acquisition and in response to changing market dynamics with more customers wanting an end-to-end solution. Rob Ashe, CEO of Cognos, said that the acquisition was merely a matter of taking a long-standing partnership to the next level.

The acquistion is good news all around. With ERP/RDBMS heavyweights jumping into the BI and PM markets, it would have been a tougher market for Cognos to go at alone. With IBM finally joining this space, it is one more message that BI and performance management are not departmental toys, but rather, of enterprise importance. As well, unlike other recent acquisitions there is little product overlap between Cognos and IBM, except in the ETL space in which Cognos really hasn't pushed Data Manager and I would expect IBM's Data Stage (Ascential) to lead. Mills also said that as IBM evaluates acquisitions, they consider if it will bring lift to existing products. In this regard, IBM no doubt has eyed Microsoft's impressive growth in the data warehouse platform space. IDC estimates Microsoft's growth as a data warehouse platform at 23% for 2006/2005 versus IBM's at 12% and Oracle's at 13%. Microsoft has declared that its BI solutions have helped drive sales of SQL Server as a data warehouse platform.

Being able to leverage Cognos 8 BI as part of a complete IBM stack should help DB2 sales. However, the acquisition comes on the heels of IBM and Business Objects agreeing last month to bundles and cross-sell each other's products, with IBM intending to bundle a BusinessObjects XI starter edition as part of DB2 sales. One has to question if that agreement will remain intact and how quickly Cognos 8 could be bundled instead or in addition. With all of these acquisitions, a number of these vendors will have to re-adjust their roles from arch competitors to also being partners. All have stated they will continue to be open and modular. Only time will tell how well any execute on that point. With IBM Global Services being the power house that it is, expect other Cognos partners such as HP and Accenture to re-adjust alliances.

The only negative to this deal is worrying comments that IBM executives that business intelligence is "desktop reporting" (see Mark Smith's blog). Let's hope Cognos executives convince them otherwise!

What does this mean for the smaller pure-plays such as IBI and MicroStrategy? Read my analysis in "How Buying Changes in the New BI Landscape."


Cindi Howson, Founder, BIScorecard, a Web site for in-depth BI product reviews
Author: Successful Business Intelligence: Secrets to Making BI a Killer App
Author: Business Objects XI (R2): The Complete Reference



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