Customers running Cognos Inc.s tools must keep a close eye on plans for the company when IBMs purchase of the business intelligence firm closes early next year, users and analysts said last week.
IBM last week announced that it had agreed to buy Ottawa-based Cognos for $5 billion in cash.
Ted Bross, associate director of administrative information services at Cognos user Princeton University, said that he hopes that IBM can use its financial muscle to improve support for the BI tools. [Cognos] is not very strong in training, documentation and customer support, he noted.
However, Bross said that at this point he isnt confident that the IBM deal is a good one for Cognos users in the long term, especially at non-IBM sites. We are primarily an Oracle shop, and this may eventually conflict with our strategic direction, he said.
We have tried to build our [Cognos] reporting strategy and data warehouse in such a way that we could switch products if need be, Bross noted. However, he added, it would be an incredibly arduous process to rewrite all reports using different technology.
Mark Smith, an analyst at Ventana Research Inc. in San Mateo, Calif., said that one early decision by IBM to incorporate Cognos into its Information Management software unit doesnt bode well for users.
The Information Management group includes IBMs database management, data warehousing, content management and data integration products.
Smith contended that the move shows that IBM considers BI tools to be less important than the offerings of its stand-alone WebSphere and Lotus units. Well have to see how that plays out, he said. To put it down at that level is not well connected to how the market perceives the value of BI and performance management.
David OConnell, an analyst at Nucleus Research Inc. in Wellesley, Mass., noted that the success of the IBM-Cognos deal will depend largely on whether IBM tightly integrates the acquired tools with its own software products.
I am not sure it will be more than a bolt-on for IBM, he noted. For end users, I am not sure what the benefit is. For IBM and Cognos, it means they can get into each others customer bases.
Cognos users, OConnell added, must be sure to question their IBM sales representatives about the companys product road map before the deal closes.
OConnell did note that Cognos users are better off than customers of Hyperion Solutions Corp. and Business Objects SA, which have recently been swallowed up by larger vendors Oracle Corp. and SAP AG, respectively. Those companies will likely force customers of the acquired firms to buy their expensive ERP applications, he said.
Oracle completed its $3.3billion acquisition of Hyperion last spring, and SAP expects to close its agreement to buy Business Objects for $6.7 billion in the first quarter of 2008.
Mark Lack, planning and financial analysis manager at Cognos user Mueller Inc., a Ballinger, Texas-based manufacturer of building materials, said that he expects that the deal will benefit Cognos users. Being part of IBM will open up Cognos solutions to an even wider audience, Lack said.
At a press briefing, Steve Mills, senior vice president and group executive for IBMs software group, said he expects the combined firm will better respond to user needs than a stand-alone Cognos could.
Independent companies finally reach a point where it becomes very challenging to execute against a set of complex, high-performance requirements, Mills said.