From the Blogosphere
November 13, 2007 8:41 PM
From Business Intelligence for Business People
The story has hit the airwaves. One of the more obvious acquisitions in recent months completes the trend that has taken place in the Business Intelligence industry for several months/years now.
What this means for the industry specifically is too hard to tell at the moment. So as a CIO or business manager will you jump for joy or go running for the door.
IBM acquired the Canadian-made Cognos yesterday for $5 billion. This Wallstreet Journal article states Cognos is No. 3 in the BI industry following SAS (No. 2) and BO (No. 1). The IBM price is slightly less than SAP's BO ($6.78B) and more than Oracle's Hyperion ($3B).
Some may say IBM's hand was forced with the industry consolidation by competitors Oracle and SAP. However I think the IBM-Cognos deal was in the works for some time.
Cognos and IBM have 'played' together on large government projects. IBM tested Cognos tools in their performance lab. IBM and Cognos have done joint whitepapers. IBM consulting services has people focused on Cognos. I think the writing was on the wall -- just when and how much.
Plus you don't make a $5B decision in cash over a couple months because of pressure from your competition. At least I couldn't (my cheques don't have the space to write that many zeroes).
Overall:
IBM is known for going after the "big and scary projects that no one can do" -- in IBM's words. Cognos is known for selling to large companies and governments. Probably a match made in heaven.
But let's take a step back for a moment. We know the acquisitions of BI companies will change the landscape of the industry. BI could simply slide into being another component of ERP vendors. Or BI may continue to stand on it's own as a business improvement driver by gauging performance.
The big picture question is, "with independent BI companies gone, where will BI go?"
Just like most acquisitions, the ecosystem of toolset vendors, consultants, customers, and 3rd party vendors can change dramatically. How? I would like to think our drive to improve BI for the betterment of organizations and people is the underlying goal. But that may get in the way of profits, selling licenses, and implementing large BI projects because they can.
Don't let them tell you "nothing will change; it is status quo" -- it will change.
Don't let them tell you "more benefits exist by being acquired" -- there can be huge drawbacks.
Don't let them charge more because "IBM, Oracle or SAP specialists are doing your BI" -- the business problem and expertise have not changed.
Don't let them tell you "this is the only way to do BI" -- get a second opinion from someone independant.
And welcome to the confusing jungle of seriously large companies where BI is just one line item on their financial plan.
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