The deal should come as little surprise in a year in which Oracle acquired Hyperion, Microsoft bowed a performance management platform and SAP set plans to acquire Business Objects. But IBM painted the deal as a carefully considered transaction.
“Customers are demanding complete solutions, not piece parts, to enable real-time decision making," stated Steve Mills, senior vice president and group executive, IBM Software Group. "Our broad set of capabilities – from data warehousing to information integration and analytics – together with Cognos, position us well for the changing Business Intelligence and Performance Management industry. We chose Cognos because of its industry-leading technology that is based on open standards, which complements IBM's Service Oriented Architecture strategy.”
Despite IBM assertions that it "has been providing Business Intelligence solutions for decades," the deal runs counter to long-standing statements by IBM executives that it would not venture into the query and reporting market, core capabilities of the Cognos 8 business intelligence platform. But with two of the top-six players in BI now in the hands of rivals, IBM was under pressure to jump more deeply into the market.
With about 4,000 employees, more than 25,000 customers and approximately $1 billion in revenue, Cognos was the largest independent BI vendor remaining, and it also has extensive performance management capabilites not matched by Information Builders or Microstrategy, two other remaining independents. (SAS is larger than Cognos at roughly $2 billion, but the company earns most of its revenue on analytics, and it had recently forged a closer partnership with Teradata, an IBM data warehousing rival.)
The combination of IBM and Cognos presents "minimal overlap in products, a broad range of technology synergies, and the resources, reach, and world-class services to accelerate our vision," stated Rob Ashe, president and chief executive officer of Cognos. "Furthermore, this combination allows Cognos customers to leverage a broader set of solutions from IBM to advance their information management driven initiatives." IBM said it will "integrate Cognos as a group" within its IBM's Information Management Software division, leaving Ashe at the helm, reporting directly to General Manager, Ambuj Goyal. The acquisition is expected to be completed in the first quarter of 2008.