IBM's $5 Billion Cognos Offer Signals Shift Beyond Middleware - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Software // Enterprise Applications
News
11/12/2007
11:03 AM
50%
50%

IBM's $5 Billion Cognos Offer Signals Shift Beyond Middleware

IBM says the goal is to create so-called business intelligence tools that outperform the competition in terms of speed, broad compatibility, and completeness.

IBM's proposed $5 billion buyout of analytics tools vendor Cognos would move the company beyond its traditional strength in middleware -- business software that functions behind the scenes -- into the market for software that executives and managers manipulate to gain insights into key performance metrics.

The goal of the deal, IBM officials said, is to create so-called business intelligence tools that outperform the competition in terms of speed, broad compatibility, and completeness. "Customers are demanding complete solutions, not piece parts, to enable real-time decision making," said IBM senior VP Steve Mills, in a statement.

The buyout, IBM's largest, would also move the company a step closer to reentering the end-user applications business -- a market it abandoned years ago save for its Lotus Notes franchise.

Cognos offers business intelligence tools, like its Cognos 8 suite, that let users generate reports, charts, and other tools through which they can quickly get a handle on metrics such as sales, inventories, fulfillment rates, and the like. The Ottawa-based company's customers include corporate giants like BMW, Bank of America and Dow Chemical.

For its part, IBM -- in part through acquisitions -- has been building a strong portfolio of middleware that can extract raw data from various departments within an enterprise and feed it to business intelligence tools like those offered by Cognos.

In recent months, IBM has bought out middleware vendors Ascential Software, FileNet, Trigo, and others.

By adding Cognos, IBM would be in a position to offer customers a complete information management platform that begins with its DB2 database line, runs through its middleware offerings, and extends out to Cognos-powered dashboards and reports tapped by line-of-business end users.

"IBM is a perfect compliment to our strategy, with minimal overlap in products," said Cognos president and CEO Rob Ashe, in a statement. Ashe plans to join IBM, where he would report to Ambuj Goyal -- GM of IBM's Information Management Software division.

IBM's desire to move closer to the end-user may be a response to competitive pressures. IBM rival Oracle recently snapped up Hyperion for $3.3 billion, while SAP acquired Business Objects for $7 billion -- moves that made IBM's software portfolio appear lacking by comparison and left Cognos as the only major business intelligence vendor without a dance partner.

"This may be more of a move to try to stay relevant in the enterprise software space for IBM," said David O'Connell, a senior analyst at Nucleus Research.

Cognos employs about 4,000 workers. IBM did not disclose plans for integrating the company's workforce into its operations. The $58 per-share offer remains subject to a number of closing conditions and regulatory approvals.

In early trading Monday, Cognos' shares were up almost 8% to $57.11 per share.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll