Things happen in 3s IBM buys Cognos

Things always happen in 3s – IBM buys Cognos

The thought on the street was that Cognos had to get bought soon, given the business intelligence (BI) consolidation land-grab of late — punctuated by Oracle’s acquisition of Hyperion and SAP’s buy of Business Objects.

So now Big Blue steps up to the plate, and for $5 billion in cash, buys Cognos. This quite large acquisition for IBM quickly adds more BI-oomph to the IBM "Information" portfolio, but also importantly takes Cognos off the market from anyone else. Other suitors would probably have been Microsoft and perhaps HP. This BI value could have burnished HP’s total managment drive and complemented the Opsware purchase.

The only real surprise in IBM’s Cognos buy is the way it contradicts IBM software chief Steve Mills longtime stance that IBM isn’t in and doesn’t want to be in the applications business. IBM spent $3.5 billion in 1995 buying e-mail and collaboration applications maker Lotus, a deal the company has struggled with: IBM’s Lotus integration was rocky, and Lotus Notes continues to steadily lose ground to Microsoft’s rival Exchange.

Mills softened his "no applications" position in a conference call with press on Monday, following the Cognos announcement. "We haven’t changed our strategy in any fundamental way. We have applications technology in our portfolio today," Mills said, citing Notes and FileNet, the content management software maker IBM bought last year.

Pending shareholder and regulatory approvals, IBM expects the Cognos deal to close in the first quarter of 2008. Channel integration plans won’t be worked out in detail until further in the planning process.

It will be interesting to see how IBM will support all the Cognos partnership deals with many vendors, ISVs, channel players, SIs, and users. For example, Cognos just joined a partnership with Software AG, which competes with IBM on several levels.

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