Although Cognos might very well be acquired, let’s examine two related arguments that people made. First, they infer that a BI independent company will not survive against the tech titans of Oracle, SAP and Microsoft. Second, when people refer to Cognos as the last major independent BI company they imply that there are not any other thriving or viable firms in the industry.
BI independents cannot survive
Oracle (ORCL) and SAP just spent $10 billion collectively to buy a couple of the top independent BI firms, Hyperion Solutions and Business Objects, during the last year. If the titans were so dominant why did they feel they needed to buy these firms? If the titans are the preferred business choice for BI software why are they ranked # 4, 7 and 8 according to IDC’s 2006 estimates for BI tools revenue?
There is a split personality in business technology purchasing: one side wants to purchase everything from one vendor, the other side just wants to buy the best tool to do the job. It is clear that to date, there are plenty of businesses buying the best rather than just buying whatever their app vendor sells.
Cognos is the last one standing
According the IDC 2006 estimates on BI tools revenue there are five firms with approximately $200 million or more sales that are not the titans or anyone they have acquired to date. SAS was number two, ahead of Cognos, but it seems to be forgotten because it is private. MicroStrategy, Information Builders, SPSS and Actuate have been successful in this market and have had loyal customers for years.
And there are plenty of smaller (less than $100M revenue) BI firms that sell very capable BI solutions. These include companies that you might have seen on industry analysts’ charts such as QlikTech and Panorama Software, as well as those firms below everyone’s radar except their customers such as Dimensional Insight and Board International. All of these BI independents have tools that their customers have chosen over the titans' products.
The tech titans have been on a M&A (mergers & acquisition) binge the last few years, but large firms gobbling up smaller ones is not new to our industry. People will continue to launch new, innovative and nimble companies. Some with thrive and some will not. Those that succeed will offer their customers software of value. And maybe they will be acquired eventually only to replaced by newer firms.