01:31 PM
Ted Kemp
Ted Kemp

Q&A With Information Builders CEO Gerry Cohen

The chief executive shares his views on "operational" BI, growing competition from enterprise software companies, and recent enhancements to Information Builders' WebFocus software.

Business intelligence has experienced major shifts over the last year. Companies are expanding the benefits of BI beyond high-level management users, to their more numerous line-of-business workers and process administrators -- the phenomenon known as "operational BI." As traditional vendors scramble to meet users' operational demands, they're facing growing competition from enterprise software companies, which are releasing their own analytics tools.

New York-based Information Builders stands squarely in the center of both trends. Founder and CEO Gerald Cohen has long touted the business intelligence and application integration vendor has a provider of operational BI, and he acknowledges the analytic advances made by big enterprise rivals.

Cohen shared a Q&A session with Business Intelligence Pipeline to share his views on those trends, explain enhancements to Information Builders' WebFocus software, and provide insight into the privately held vendors' recent sales performance.

Business Intelligence Pipeline: Enterprise software companies such as Microsoft, Oracle, SAP and Siebel are adding analytic capabilities to their applications. How will you compete with that?

Cohen: Take Siebel analytics, for example. It's sold to companies that already have Siebel installed. We have competed with Siebel, but we've never competed with them in a situation where the customer didn't already use Siebel. The same is somewhat true of Oracle analytics. If you're a heavy Oracle shop, hey, why not install it? But in new customer situations, we rarely see the database companies come in. The same is true of SAP. If the customer doesn't already have SAP, SAP isn't a factor.

Business Intelligence Pipeline: Where do you position yourself vis--vis Business Objects, Cognos, Hyperion, and those competitors? What's your differentiator?

Cohen: The key is operational BI. We've been doing operational BI forever. Our differentiator is that we do larger deployments with larger applications. We have deployments with thousands of users -- banks and credit card companies that want their customers to be able to look at their accounts, for instance. We tend to get the larger deployments, which are always operational BI systems. The other guys are strong in the OLAP markets. But OLAP is something that very few people do within any given organization.

Business Intelligence Pipeline: Given your focus on enterprise market, do you still target the mid-size and small-business BI markets?

Cohen: Yes. Smaller companies don't fool around with analytical applications. The companies under $1 billion in revenue all use operational BI. They want systems that move them forward as a business. Small companies just don't have the plethora of systems that the big guys have.

Business Intelligence Pipeline: Advanced visualization is something Information Builders has touted recently for its WebFocus BI tool. Describe that functionality.

Cohen: Although we specialize in operational BI, we still compete on the OLAP and analytical applications. In the analytical area, we've introduced visual OLAP. Typically with OLAP, you get one report, and then you click for the next report. Then you click again to get the next report after that. We're putting all that information on one screen so users can visualize, for instance, a series of four graphs. When you change a piece of a pie chart, all the other graphs change with it. We have a product called Visual Discovery, which is in the OLAP area and competes with the OLAP vendors.

Business Intelligence Pipeline: Since Information Builders is privately held, can you give us insight into your recent financial performance?

Cohen: We had a very good third quarter, which ended Sept. 30. Looking at the nine-month period, our level of new business was the best we've had in four years. People are buying BI. We're doing more large deployments. We have lots of deals over half a million dollars. It's a growing marketplace.

Business Intelligence Pipeline: Differentiate between your BI product revenue and your integration product revenue.

With BI revenue versus integration revenue, there's about a 15-20 percent overlap. Lots of customers like to buy from just one vendor. We have implementations where the customer uses both applications. We've got one customer in the credit card industry, for example, that wants to be able to transfer all their data into a warehouse within five minutes of the data changing. So they use our integration technology to feed those warehouses. Then we're also the reporting agent on that particular warehouse.

Business Intelligence Pipeline: Which side of the business is growing more?

Cohen: Our integration business is doing great. That's a business, though, that has both direct and indirect sales channels. We're the largest provider of adapters in the world -- the "last mile" of integration, if you will. You might have, for example, an SAP system that needs to read J.D. Edwards data. We provide the adapter to read J.D. Edwards from SAP's NetWeaver. SAP buys our adapters and resells them. Oracle buys and resells them. BEA resells them. Sun resells them. All these guys are part of our indirect channel.

Business Intelligence Pipeline: BI vendors such as MicroStrategy and Business Objects say customers are "standardizing" on their products. Is this standardization trend real, and if so, what progress has Information Builders made there?

Cohen: Yes, it's real. We're all doing that. We all say we have enterprise BI, and we're pushing to become the enterprise standard. I'll say this: There's a trend among customers to reduce the number of vendors they use. But that's a trend that companies have had for 20 years. Imagine a company saying, "Oh no. We want to increase the number of vendors we use." During the era when consultants were saying best-of-breed was the way to go, companies ended up with 300 vendors, and that was a lot. The trend to cut down the number of vendors has always been there.

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