IBM’s Cognos analyst event this week in lovely Ottawa, Canada showcased strong evidence of progress and continuing momentum for one of the largest software acquisitions of recent years. An international group of analysts listened to a series of discussions that highlighted key developments:
- The launch of Cognos Express, aimed at mid-market buyers
- New Analytic Applications that continue to expand the portfolio and IBM’s increasing commitment to this new form of applications
- Internal integration of Cognos within IBM proceeding and gaining momentum
- New Performance Blueprints continuing to roll out
- Upcoming product plans, with numerous launches planned at the Information on Demand conference in October
- The planned SPSS acquisition, pointing the way to new opportunities
Cognos executives have reason to be pleased with internal developments on a number of fronts. Retention has been good since the acquisition, but to some observers, it was even more meaningful to see a number of key Cognos players moving into roles within the IBM Software Group, gaining seniority, influence and the opportunity to be an advocate for the product agenda. Strategy VP Andy Warzecha noted that Cognos is “front and center within IBM today,” pointing out organizational alignment with the “Information-Led Transformation” message within IBM’s overall Smarter Planet theme. He highlighted the enormous (over $10B) investment, the 4000-plus Business Analytics and Optimization (BAO) team consultants, and the launch of Smart Analytics Systems as indicators of commitment to the $105B market opportunity IBM sees. The message: business optimization spending will grow twice as fast as business automation spending, and IBM is ready.
Les Rechan, VP of Sales, Services and Solutions, followed with a look at go-to-market issues. His discussion of IBM’s deployment of teams into emerging markets and substantial growth in programs, staff and infrastructure made a powerful case for IBM’s prospects as it ramps and mobilizes its enormous footprint to add to Cognos’ existing assets. Rechan, who orchestrates 25 integrated market units, cited as an example IBM’s acquisition of its former Cognos partner in China. His analysis makes clear the value of an organization with IBM’s scope: “42% of our opportunity is outside of the 3 major provinces,” he said, “and we have tripled our sales force, added 11,000 business partners, and grown from 13 branches in 2004 to 28.” The financial results are beginning to show: IBM’s latest quarterly earnings call specifically noted overall Cognos revenue growth of 30% in constant currency in Q2 over last year. Rechan says this is far higher in the growth markets, and cited TM1 and Cognos Controller as showing strong growth. Wall Street, he pointed out, has taken notice even during a difficult year for the stock market: in Q1 2008, IBM’s stock price was 105; it was recently 120.
Rechan cited competitive wins against SAP and Oracle, and illustrated the degree to which big wins leverage the full software portfolio. Case after case he discussed combined IBM software assets such as Cognos 8 BI, TM1, InfoSphere and WebSphere to deliver performance management and optimization projects. In addition to highlighting the successful roll-out of Cognos BI products, IBM speakers focused a great deal on the growing importance of Performance Blueprints, which allow rapid delivery of functionally-focused projects. Adding to business functions like Allocations Planning, Capital Project Planning and 15 others, the company announced another half-dozen ranging from Workforce Planning to Financial Analytics Product Profitability.
New announcements also detailed the expansion within Industries. Health Care, Higher Education and Retail were on display, with offerings including Provider Planning, State Government Executive Dashboard, and Store Development. IBM announced the availability of 4 new Analytic Applications, one of which was partner-developed, and teed up a day and half of presentations from the development and marketing teams that pointed the way to the year ahead.
Overall, the event, ably organized by an excellent AR team, made a strong case; response among the analyst colleagues I chatted with was quite positive. IBM is a huge organization, and mobilizing all its resources to move in the same direction is no small task. But the Cognos team is clearly well-established, integrated into existing programs (such as support – consider the magnitude of training and integrating global product support on the scale IBM offers it, a task which is now complete), tied in to the sales and partnering teams, and ready with campaigns for the year ahead. Execution is not in question. In other posts, we’ll look at product strategies and plans.