I’ve been pondering for sometime about a future hookup of IBM and Cognos. Motley Fool talked about it maybe six months ago and IBM’s appetite seemed insatiable around that time. This announcement (IBM to use Cognos as its embedded workforce performance reporting and analysis engine) makes that more likely I suppose. There are only three BI players out there and Hyperion was snapped up by Oracle earlier this week. And then there were two. IBM doesn’t really have a relationship with Business Objects and they are increasingly wed to Cognos and BI is increasingly important (at least in the eyes of tech buyers). I’ve looked at IBM’s acquisitions over the past months, and they are all companies that IBM knew well from these sorts of partnerships. But, they also were all (excepting ISS $ Filenet) on the small side, giving IBM the beer-goggled belief that they could add value through the purchase with their legion of sales folks and solid reputation. (I ought to disclose that I am of the opinion that most acquisitions are the result of upper management sitting around in some meeting trying to come up with something clever to do to look productive. The other acquisitions happen because someone lost a bet I guess.)

Now Cognos would be hard for IBM to swallow - a current market cap of $3.5+ Billion - is about what Lotus and PWC’s Monday consulting arm were and IBM has such great momentum right now it would be unwise to risk a Lotus-type organizational shift simply to block other suitors. But… the market seems to be expecting someone to come in and gobble them up. But… the timing just doesn’t feel right for it to be IBM. IBM has a great game plan that’s just starting to yield fruit and the risk reward of that addition likely isn’t worth it right now.

Cognos is interesting though, because there is so little overlap with IBM and because their BI technology is so good (correct me if I’m wrong there… I’m a user rather than a developer). They practically invented the concept and are trusted in the marketplace and taught in business schools. Consolidation is happening so fast and IBM management has received only accolades from the recent binge.

So I don’t know. As I close my wishy-washiest post of all time, any thoughts from readers on the acquisition would be appreciated.

Tags:No Tags