With Cognos Deal Complete, IBM Readies Assault On BI Market

IBM rolls out 10 integrated Cognos-IBM business intelligence packages specifically configured for industries like banking, retail, healthcare, life sciences and others.

Paul McDougall, Editor At Large, InformationWeek

February 7, 2008

4 Min Read

IBM has taken the wraps off its plan to integrate business intelligence products from recently acquired Cognos with its existing information management software.

The company is looking to deliver what senior VP Steve Mills called "a complete solution" of business analytics and reporting tools that are tightly integrated with IBM's back end content management and database middleware. "We're going to leverage Cognos technology on top of IBM technology to take us deeper into business analysis and analytics," Mills said.

To that end, IBM on Wednesday rolled out no less than 10 new integrated Cognos-IBM business intelligence packages specifically configured for industries like banking, retail, healthcare, life sciences and others.

One offering adds Cognos' Store Operations and Planning blueprints to IBM's Retail Integration framework.

For banking, IBM launched the Financial Risk Insight Solution, which couples the IBM Banking Data Warehouse with Cognos 8 Business Intelligence modules. The offering is meant to give financial services companies an enterprise-wide view of risk across various products, divisions and geographies.

Pharmaceutical companies will be able to tap the new Life Sciences Promotional Spend and Compliance Solution to stay atop evolving state regulations on drug promotional spending and determine where marketing dollars are best spent based on regional sales and clinical data.

IBM's Global Services arm also is rolling out a new set of related services designed to get customers up and running on Cognos software quickly.

Still, there's not much that's completely new here -- except that businesses can now purchase a fully integrated BI system directly from IBM. That means IBM will be able to present a complete BI package to the business managers who frequently make the call on such technology. "It will be much easier for them," Mills said.

They'll also be less likely -- IBM hopes -- to build a Cognos package that runs on middleware from rivals like Oracle. Cognos' applications "fill a big void in IBM's stack," analysts at Gartner said in a report issued this week.

IBM completed its $5 billion acquisition of Cognos on January 31. Mills says IBM will not discontinue any existing Cognos products and will maintain the company's base in Ottawa. No sales or product development layoffs will occur, but there will be minor back office redundancies as a result of the deal.

IBM is just one of several big vendors that are building out their business intelligence platforms. Oracle recently purchased Hyperion for $3.3 billion, while SAP bought out Business Objects for $7 billion. Microsoft also is looking to become a bigger player in the mid-market with its 2007 Office System and ProClarity tools.

Gartner expects the BI market to post a healthy growth rate of 8.6% annually through 2011.

Why all the interest? Businesses are overwhelmed with information -- and are willing to spend big money on tools that will help them sort through it all and make better decisions.

Take the restaurant industry. Sales can fluctuate greatly, meaning stores often find themselves with too much, or too few, staff at a given time. To minimize that, Papa Gino's Inc., a Dedham, Mass.-based pizza chain, last year spent a high six-figure sum to install and implement Cognos BI and Enterprise Planning tools that allow district managers to mine sales trends to predict staff requirements. "If you overestimate labor, you're wasting money," said Papa Gino's CIO Paul Valle. "If you underestimate, then you hurt the customer experience."

Among other things, the Cognos software Papa Gino's is using shows what sales were at a given location on a given day one year prior -- allowing for more accurate estimates.

So how does Valle feel about his nimble BI vendor's acquisition by the world's largest computer company? "Cognos works with me like a partner. If IBM maintains that culture then I'm okay with it," he said.

Cognos CEO Rob Ashe insists things won't change. "Culturally, we're very similar to IBM," Ashe said. To boot, he said IBM has pledged to allow Cognos to operate more or less as an independent unit. "At the same time, we get access to their people and technology. It's the best of both worlds," he said.

IBM has bet $5 billion that customers will see it that way.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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