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IBM To Amplify Cognos' Position, Officials Hope by Stephanie Neil • Sign up to receive ME Daily News Alerts • POSTED on Sunday, December 23, 2007 4:00:00 AM |
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The highly anticipated union between IBM and business intelligence vendor Cognos is expected to close this quarter, and, with it, IBM hopes to gain a position of strength against the likes of Oracle and SAP, both of which have become heavy hitters in the BI space through acquisitions of their own. But can Big Blue make its BI better than the rest?
IBM will have to offer significant value-add if it wants end users to respond with more enthusiasm than the analyst community did when the deal was announced in November 2007. At that time, analysts who had predicted the acquisition based on the duo's 18-month cross-selling arrangement, didn't bat an eye when the deal was finally announced. "It's just another major vendor buying a BI performance management vendor because they see the value in that space and they are broadening their portfolio around it," said Dave Kasabian, an analyst at AMR Research in an interview with Managing Automation late last year.
IBM, however, aims to distinguish its BI offering by integrating it into its Information on Demand initiative, a combination of open standards, a service-oriented architecture, and IBM database and middleware technology that can provide immediate access to enterprise data, regardless of where it resides. But the offering also needs applications, which is why the company is on a buying spree. The Cognos deal, priced at approximately $5 billion, will be the 23rd acquisition the company has made for the Information on Demand business.
The Cognos acquisition is significant, the company said, because it complements IBM's existing data mining, information integration, and enterprise content management capabilities. There is minimal overlap in products and technology between the two vendors, and there are already joint engagements with customers, many of which are manufacturers.
Though Cognos does not break out revenue by vertical, the manufacturing sector is one of the company's largest industries, Cognos officials told Managing Automation. Under the IBM umbrella, Cognos gains a broader reach across industries and geographies, as well as a complete set of consulting services.
"We feel strongly that IBM will amplify our ability to lead in performance management by accelerating the investments we make in products and go-to-market," said Paul Hoy, Cognos' director of manufacturing industry solutions. "It is extending our reach globally and expanding our partner network."
Once IBM fully digests Cognos, the company promises "an integrated solution for unlocking the business value of information; reduced administration and faster deployment; and an enhanced, single point of worldwide support," according to an IBM presentation. End users will also benefit from more than 3,800 skilled BI consulting experts in 25 countries.
It will all add up to what end users really want, officials said. "Customers are demanding complete solutions, not piece parts, to enable real-time decision-making," said Steve Mills, senior vice president and group executive, IBM Software Group, in a statement.
This article originally appeared in the January 2008 issue of Managing Automation.
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