« Business Driven Service Design Survey | Main | Decision Services »

Today IBM announced its intention to acquire Cognos in an all-cash transaction at a price of approximately $5 billion USD or $58 USD per share, with a net transaction value of $4.9 billion USD. The acquisition is subject to Cognos shareholder approval, regulatory approvals and other customary closing conditions, and is expected to close in the first quarter of 2008.

Steve Mills introduced the analyst briefing by talking about the state of the market, with companies becoming more sophisticated about leveraging information, and using analytics for both looking back, and looking forward, becoming more pre-emptive in their decision making. He also spoke about how real-time business analytics was becoming an important part of business process management.

Just about every analyst on the call would have to agree with those statements. Last June, in the ebizQ BI in Action virtual conference this was discussed extensively both in the panel session and in a series of pre-conference podcasts. Indeed, one of the analysts questions was that we’ve been expecting this for a while, why now (answer – a $5 billion purchase takes time).

Cognos fits very well into the IBM stack. For a change it pretty much adds new functionality without adding a lot of redundancy. Furthermore, about 5 years ago Cognos re-architected their solution as a service based offering. It runs on top of IBM (and other) infrastructure software, providing real-time business intelligence and business performance management. The business performance management capabilities are key It enables companies to align, monitor and measure business operations with business strategies. This is truly good stuff – very important to business managers. Nothing for me to pick at.

Except for maybe one thing. Cognos DOES NOT provide predictive capabilities. It provides event management and alerts, but predictive capabilities require some kind of neural network or inference engine to correlate patterns of events. Such events occur throughout the organization in different processes, but when they occur together may predict something of business importance, such as a disruption in the supply chain. Both SoftwareAG (through the WebMethods acquisition) and Tibco have these capabilities. The fact that Steve Mills mentioned this as an important requirement for business management going forward may signal the fact that IBM may be in the market for some complex event processing (CEP) technology. The fact that Mills mentioned it in the context of the Cognos acquisition reveals that he considers it important moving forward. But for sake of clarity, this acquisition does not give IBM this capability.

Posted by bethgb at 12:14 PM in BI | Digg This | Add to del.icio.us

Trackback Pings

TrackBack URL for this entry:
http://www.ebizq.net/mt/mt-tb.cgi/2861