BI Market Consolidation Predictions

by Boris Evelson.

Yet another rumor crossed the wires today about Business Objects getting ready for a takeover. These rumors have come up before, and it may be nothing else but a routine exercise that BO and other vendors go through to test the market periodically.

As I already blogged back in March '07, there's no denying however that the business intelligence (BI) and business performance solutions (BPS) markets are consolidating. Last year Microsoft bought ProClarity; this year Oracle bought Hyperion, Business Objects acquired Carthesis, SAP acquired Outlooksoft, and most recently Cognos acquired Applix.

I predict that within 2-3 years there will be five major BI vendors carving up the BI and BPS market: Microsoft, IBM, SAP, Oracle and HP. There'll be much M&A activity seen from these vendors in the near future.

Here's how I see it playing out:

  • HP will probably make the next big move by acquiring somebody like Business Objects, Cognos or SAS. HP is pushing into BI market very strongly: It repositioned NeoView as a strong data warehouse (DW) platform and bought Knightsbridge — leading BI boutique strategy and implementation consultancy. It'd make a lot of sense for HP to pick up BO or SAS, since in one transaction HP would get the entire BI and PM suite. Cognos would be the second choice for them, since Cognos does not have operational ETL and data quality offerings.
  • SAP told us repeatedly that they can't justify very large acquisitions — it doesn't fit their model. So Microstrategy, Actuate or Information Builders would be more obvious pick up choices for them.
  • I sincerely hope that Oracle is more than busy with Hyperion integration and more than set in the BI and BPS markets for a while. I don't see the next big move coming from them.
Read more

BI Dominoes Continue To Fall...

by Boris Evelson.

Today Cognos announced its intention to acquire Applix, Inc for a cash tender offer of $17.87 per share, or approximately $339 million.

This acquisition is primarily about performance management, and I quote my colleague, Paul Hamerman: “This continues a trend of rapid consolidation in the business performance solutions space, following acquisitions of pure plays by larger BI and ERP vendors. Applix has been a stellar performer as a flexible platform for customers to rapidly implement applications for planning, budgeting, forecasting and business performance analytics. Although Cognos has been a leader in performance management solutions, the Applix technology gives it an opportunity to refresh its offerings and more aggressively sell to the midmarket.”

The BI side of this acquisition is all about TM1 OLAP technology. Cognos’s Powerplay OLAP product has been trailing Microsoft SQLServer Analysis Services and Hyperion (recently acquired by Oracle) Essbase in market adoption. With TM1, a memory-based OLAP cube, Cognos achieves several objectives:

  • Leapfrogs Microsoft and Oracle with one of the fastest read/write OLAP technologies on the market.
  • Provides an enterprise grade in-memory OLAP alternative to fast-growing and increasingly popular QlikTech, which is more of a departmental solution.
  • Provides additional midmarket entry points for Cognos

The future of the rest of the Applix BI products — reporting, querying, dashboards, and data integration — is quite murky. Cognos will face the same challenge as Oracle now does with the Hyperion acquisition: Establishing a strategy and a road map of overlapping product portfolio integration or sunsetting/retirement.