IBM Puts a Business Intelligence Foot in the Door at Midsize Companies

Launching a low-priced product suite with an emphasis on ease of installation and ease of use, IBM today stepped up its efforts to sell business intelligence and performance management capabilities to midsize companies with 100 to 1,000 employees. Priced starting at $12,500 (with five named users) for each of three products for reporting, analysis and planning, respectively, the new IBM Cognos Express line is an attempt to compete head to head with Microsoft in the fastest-growing segment of the BI market. The launch follows in the footsteps of SAP BusinessObjects, which introduced its midmarket-focused Edge series of products in 2007. Both companies have a lot riding on their entry-level products.

"IBM Cognos and SAP BusinessObjects executives realize that unless they can capture the hearts and minds of midsize businesses, they'll have lost the opportunity to serve them as they grow into larger businesses," says Robert Anderson, vice president of SMB Research at Gartner DataQuest. "When it comes to BI and performance management, IBM Cognos and SAP BusinessObjects have the credibility and the assets to compete in the midmarket, so shame on them if they give it up to Microsoft."

The three new IBM Cognos Express products are designed to either stand alone or complement each other as part of a complete BI portfolio. IBM Cognos Express Reporter is aimed at core query and reporting needs and mainstream use among business users, with drag-and-drop report authoring capabilities. IBM Cognos Express Advisor provides "what if" analysis and forecasting capabilities built on in-memory technology; it's aimed primarily at finance and business analysts. IBM Cognos Express Xcelerator is also built on in-memory technology, but it is aimed at multidimensional analysis, planning, budgeting and forecasting. These are core performance management capabilities for finance and line-of-business types with hands-on budget responsibility.

IBM says all three products are designed with the limited IT resources of midsize companies in mind. The software can be downloaded from the Web and then configured and administered by as few as one or two people. Data access and integration technologies are built into the software, and the building of reports, dashboards and analyses is said to be easily handled by untrained users in a self-service fashion.

"Unlike a lot of the enterprise products, these products are self contained: the security is there, the portals are there, the databases are there, the interfaces get laid down and there's not a bunch of configuration you have to go through," says Ben Plummer, director of the IBM Cognos midmarket business unit. Taking on Microsoft in a market in which it has enjoyed double-digit sales gains, IBM says the new Express products deliver more functionality than Microsoft offers through the BI capabilities built into Microsoft Office, SQL Server and SharePoint. The emphasis on planning, for example, fills a gap Microsoft opened up early this year when it suspended development of its PerformancePoint Server.

"We felt like our number-one competitor in the midmarket was going to be Microsoft, but they've backed out of planning capabilities quite significantly and we don't think they have the same level of integration we have across our product set," Plummer says.

Anderson of Gartner DataQuest agrees, noting "there was a lot of hope and interest in PerformancePoint, and there was a sense of disappointment when Microsoft decided not to go forward with it... My sense is that there's a latent market of interest in tying performance management to BI, but there have not been any properly scaled, affordable solutions for midsize companies."

The new Express products borrow heavily from Applix TM1, an in-memory analysis product Cognos acquired shortly before it was itself purchased by Big Blue in 2007. Thus, IBM is also counting on a strong contrast to the SAP BusinessObjects Edge Series, which focuses mostly on conventional BI functionality. The Edge Standard package, which starts at $19,000 for five concurrent users, includes reporting, query and analysis capabilities. To SAP BusinessObjects' credit, concurrent licensing is generally more flexible and attractive than the named-user approach IBM is using. On the other hand, the Edge offerings require optional upgrades to add data integration and data management capabilities.

Given its multidimensional (OLAP-style) analysis and planning capabilities, IBM Cognos Express will also likely compete head on with QlikTech's QlikView software, an in-memory offering that has been one of the fastest growing products on the BI market in recent years.

"QlikTech also offers reporting, but they don't have a BI stack that includes data integration and data quality software or aspirations to address performance management," Anderson says.

The IBM Cognos Express products are expected to ship within days, and a free trial edition will be made available as a download on September 29. The starting price of $12,500 includes five named users, and the price per user is reduced at higher volumes up to the maximum of 100 named users. As deployments scale up, content and data are accessible and portable into enterprise-level Cognos and TM1 deployments. IBM Cognos Express deployments can also be accessed as a node on Cognos Enterprise portal servers. Keeping the limited budgets of midsize firms in mind, IBM is also offering a $25-per-user, per-month finance plan that includes all software, installation and integration.