Cognos Looks to CPM

Rob Ashe, a 20-year veteran of Cognos Inc., was recently named the companys president and CEO, succeeding Ron Zambonini, who has been named chairman. In an interview following the promotion announcement with Executive Editor Stan Gibson and Senior Writer Dennis Callaghan, Ashe discussed his plans to turn the companys focus to corporate performance management, building on Cognos product strengths in BI (business intelligence).

Youre about to take over the reins of Cognos. Whats the first thing youre going to do?

The first thing Im going to do is stay on course. Ive worked with Ron for 10 years. We have a strategy that we think is going to bring great rewards to the company, and weve been executing on that strategy for the last three or four years.

Second is to move the company to the next level. We think corporate performance management, or CPM, is the next big thing in the marketplace. It is going to support a multibillion-dollar vendor. My job is to deliver the company leadership in corporate performance management, and thats what I intend to do.

Weve focused on the products that make that up. ReportNet, which we launched last September, has been very successful. We bought a planning company, Adaytum [Inc.], this past year. Weve built the scorecarding company. Our challenge is to evolve our current channel from one that sells products to one that sells broader solutions to big companies.

Third will be to continue to brand the company for the corporate performance management marketplace.

Is there a difference between corporate performance management and business performance management?

Its pretty much the same. Gartner [Inc.] calls it CPM; Meta [Group Inc.] calls it BPM. Its the focus on a system—including finance and operations—to drive better decision making throughout a company.

Isnt it kind of a delicate dance, to focus on corporate performance management while updating other products? You just released ReportNet, which is squarely in your core BI space. That was your best-performing product in the last quarter.

Youre right. There is a delicate balance to achieve here. We believe there are two markets coming together to form the corporate performance management market: the business intelligence market and the market for planning solutions through finance. Companies are looking at how they put them together to drive the decision-making platform. We have to be successful in business intelligence to win CPM, and thats what we intend to do.

You talked about the business model evolving to solutions. Are there any vertical areas where you think youll be hot in the next few years?

We think financial services. Pharmaceutical and the public sector are also very ripe areas. The new CPM team is targeting those industries.

Everyone is talking about predictive analytics. Hyperion [Solutions Corp.] and Business Objects [S.A.] are talking about it.

Weve had a predictive analytics tool called Foresight for six or seven years. Its a modeling tool. A major part of the predictive market is planning. Thats driven by high participation—lots of people attached to a server-based planning product. Were seeing that as the hot area.

So its about planning, rather than analytical CRM?

Yes.

Why do you think ReportNet has been so successful so far?

We started from the ground up four years ago with a whole new architecture. Its well thought-out.

Second, its hit the market at the right time for high scalability and for global applications on the Web. Also, its just at the time when major organizations are standardizing on BI as a strategic capability. Until now, most BI applications have been departmental. Were seeing companies wanting to reduce the number of suppliers, just as they did with ERP.

What new releases are on the horizon for the rest of this year?

We released ReportNet 1.1 in February and Planning 7.2 in February. A follow-on release to 7.2 [7.3] in May will extend Excel capabilities in the planning environment. Excel is key to what people do on the desktop, and were embracing Excel in workflow and planning.

By the end of calendar 04 we should have our Series 8 of ReportNet heading to beta. ReportNet represents the architecture of our future products, and Series 8 brings that architecture to our Power Play and event-notification products. Cognos Series 8 will focus on our entire product platform under the ReportNet architecture. Also this year, there will be a new version of our score-carding—Version 3—which will ship some time around midyear.

Is this a paradigm shift?

The capabilities of the browser, the sophistication of the back end and the service-oriented architecture of the product is a change in paradigm. People dont just want reports on paper, they want reports on the Web that are linked to other applications.

What kind of revenue increase would you expect to see when they are all on the same architecture?

More than 10 percent certainly. Revenue is $770 million, up from $683 million in the year just gone by.

Are you seeing the same competitors now that you saw a few years ago?

Theres been a lot of consolidation. The BI market is down to a smaller list of vendors for large opportunities. Weve seen the ERP customers get real active in the BI area over the last couple of years.

You had a significant acquisition last year. How do acquisitions figure into your business plan at this point?

We had a very successful acquisition of Adaytum last year. The planning capability was a very strategic addition. We dont have any current plans, but weve been very successful generating cash and wed like to put that to work. So were very open to acquisitions. We maintain a good corporate development capability. Were always looking.

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