IBM on Monday announced plans to buy business intelligence software company Cognos in a $5 billion all-cash transaction.
The acquisition, which was rumored for several months, continues IBM's strategy of acquiring companies to fill out its software portfolio and boost earnings growth.
Cognos, a public company based in Ottawa, Canada, provides tools for building business reports and business performance management dashboards.
The software will complement IBM's existing set of products for data warehousing and information management.
Cognos' existing products will "match nicely with (IBM's) middleware and software products," Steve Mills, senior vice president and group executive of IBM Software Group, said during a conference call Monday.
Mills said Cognos' employees and management staff will remain in Ottawa. The companies would not comment on whether layoffs were planned as a result of the deal.
Cognos CEO Rob Ashe
Cognos President and CEO Rob Ashe would not comment on whether other companies bid for Cognos. He said the company was not for sale before this deal developed, however.
Ashe said there is virtually "no product overlap" between the two companies' product lineups.
This marks the 23rd acquisition IBM has made to further its "information on demand" strategy. The transaction, which works out to $58 per Cognos share, is expected to close in the second quarter of 2008 and provide shareholders a net value of $4.9 billion, IBM said.
The move accelerates consolidation that has already begun in the business intelligence area.
After a number of standalone business intelligence companies combined a few years ago, Oracle bought Hyperion for $3.3 billion earlier this year. And last month, SAP announced plans to acquire Cognos' archrival, Business Objects, in a deal valued at more than $6.8 billion.
A lot of money is at stake in the business intelligence market. AMR Research, for example, expects spending in the business intelligence and performance-management arena to reach $23.8 billion by the end of the year, reaching a level that would jump ahead over last year by 3.6 percent.
Cognos will become a group within IBM's Software division headed by Ashe.
Update: 10:26 a.m.: Analysts note that there a number of players in the business-intelligence market, but the IBM-Cognos announcement marks an end to the "big three."
"After the SAP-Business Objects announcement, Cognos sent a message to the analyst community that 'we are the last man standing, woo hoo.' It had a sound of desperation that the (SAP-Business Objects merger would be) a good thing for us," said Lee Geishecker, enterprise strategies vice president for AMR Research.
The consolidating industry may have little effect on customers, Geishecker noted.
"The majority of customers have a mix of solutions. Some may own Business Objects and Hyperion," Geishecker said. "So the mergers don't make their integration any easier; it just changes who they make the check out to."
Meanwhile, a number of the smaller business intelligence companies may seek to merge with companies that are similar in size, or smaller, to build up their critical mass. Geishecker, however, noted that a number of these smaller companies are niche players, and their ability to merge with others will depend on their product and customer mix.
Shares of Cognos rose 7.91 percent in morning trading to $57.17 a share. And IBM also received a lift of 3.09 percent to $103.35 a share. Shares of both companies rose on a morning when the broader markets were mixed.
News.com's Mike Ricciuti and Dawn Kawamoto contributed to this report.
This blog initially misstated what day SAP announced it would acquire Business Objects. It is Sunday.
If you're an enterprise looking for a choice of vendors, your choices just got constrained even further. Oracle has been the primary consolidating force in the industry, but SAP apparently wants to get in the consolidation game, as well. Sunday it announced the acquisition of Business Objects for $6.8 billion.
As Jason Maynard of Credit Suisse writes, this "validates Oracle's consolidation strategy. It will be interesting if this leads to even more SAP deals despite their longstanding assertion that Oracle's approach was flawed."
More interestingly, it also puts SAP on a collision course with Microsoft. Maybe this even means that SAP gets into the Sharepoint game?
... Read more
One of open source's Achilles' heels is its lack of true outreach to end users. I'm not a developer. As such, I have very little influence over how OpenOffice, Linux and MySQL develop. I suppose I could request features, but how? And, more to the point, how do I derive maximum business value from the open-source projects that I use?
Actuate may have an answer to this quandary. Actuate just announced the rollout of an innovative open-source community, called BIRT Exchange, focused on open-source business intelligence. I talked with the team today and was impressed by this new community model.
Released in 2004 as a project on Eclipse, BIRT has steadily grown in importance and adoption with Eclipse. Actuate hopes that the BIRT Exchange will focus this adoption even further by improving the end-user community experience:
... Read moreMicrosoft on Thursday said it has acquired privately held Stratature, a company that specializes in so-called master data management software.
Through the acquisition of the
The idea is that by using master data management with Office, people will more easily find appropriate information, particularly data aggregated from multiple sources.
IBM has
Microsoft plans to acquire OfficeWriter, a business intelligence tool produced by SoftArtisans, the company said Wednesday.
Jeff Raikes, president of the Microsoft Business Division, is scheduled to make the announcement at the first Microsoft Business Intelligence Conference opening Wednesday in Seattle.
OfficeWriter is a ASP/ASP.NET reporting tool that enables people to generate Microsoft Office documents from any data source through a Web browser. It can manage reports from within Microsoft Office applications when working with SQL Server Reporting Services.
Microsoft said in a statement that the acquisition will strengthen what it can offer customers in terms of business intelligence.
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