Big Blue's BI in a Box - InformationWeek
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2/7/2008
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Cindi Howson
Cindi Howson
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Big Blue's BI in a Box

With IBM's acquisition of Cognos completed last week, the merged companies were quick to tout their joint product offerings and future plans at a press and analyst conference yesterday. Given IBM's role as both a data warehouse platform and a services power house, the acquisition clearly impacts existing partnerships in which IBM moves from partner to competitor. The question in this new landscape: who wins, who loses?

With IBM's acquisition of Cognos completed last week, the merged companies were quick to tout their joint product offerings and future plans at a press/analyst conference yesterday. Given IBM's role as both a data warehouse platform and a services power house, the acquisition clearly impacts existing partnerships in which IBM moves from partner to competitor. The question in this new landscape: who wins, who loses?Prior to its Cognos acquisition, IBM was a relatively BI-agnostic vendor, unlike other data warehouse platform vendors Oracle and Microsoft who offer their own BI platforms. However, late last year, IBM signed an OEM agreement with Business Objects to provide a BusinessObjects XI starter edition as part of its DB2 Warehouse. As well, as part of its iSeries platform positioned for medium-sized businesses, IBM began reselling Information Builders WebFOCUS.

Yesterday, IBM officials announced several new product bundles in which Cognos BI will now be bundled with IBM's InfoSphere Warehouse; customers who buy Cognos BI will also get limited license of InfoSphere Warehouse.

What does this mean for the Business Objects and Information Builders OEM deals? Nothing, say IBM officials. IBM will continue to provide whatever customers want and as a services company, they pride themselves in supporting heterogeneous environments. Sounds good in theory, but is that pie-in-the-sky optimism or will these OEMs die a slow death?

Here's why I think these relationships will remain solid in the near term:

- As for the Information Builders deal, WebFOCUS runs natively on the iSeries, and Cognos 8 does not, at least not today.

- In terms of market share, DB2 as a data warehouse platform is a close second to Oracle (according to IDC). Microsoft remains third but is growing significantly faster, and its bundling and enhanced BI tools have accelerated that growth. Bundling both BusinessObjects XI and Cognos 8 with new DB2 Warehouse sales seems like a brilliant way to seed the market. Organizationally, BI or Cognos remains a segment separate from Data Management (although both are under the Information Management umbrella).

- Lastly, the services business accounts for more than half of IBM's total revenues ($48.3 of $91.4 billion in 2006). Unless services people start getting compensated for pushing one product over another, no way would IBM jeopardize this high-margin segment.

Of course, with any "limited" license OEM, customers should also understand what's been scaled down - is it only the number of users who gain specific product capabilities? Meanwhile, I just can't wait to see Big Blue's new BI in a box, with both the Cognos 8 and BusinessObjects XI CDs jointly shrink wrapped. What a novel birthday present that would be!With IBM's acquisition of Cognos completed last week, the merged companies were quick to tout their joint product offerings and future plans at a press and analyst conference yesterday. Given IBM's role as both a data warehouse platform and a services power house, the acquisition clearly impacts existing partnerships in which IBM moves from partner to competitor. The question in this new landscape: who wins, who loses?

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