IBM plans to prove that math is fundamental.
Now that it has closed the books on its $5 billion acquisition of business intelligence software maker Cognos, IBM has said it will differentiate itself in the fast-consolidating BI market thanks to its decades-long research and development of sophisticated analytics derived from some serious mathematical expertise.
“IBM is a treasure trove of technology,” Steve Mills, IBM senior vice president and group executive of the IBM Software Group, said during a press conference held in New York on Feb. 6.
Mills argued that while IBM has not been known as a BI vendor in the past, “We are the only company that deals with deep analytics and sophisticated mathematics to conquer things like scheduling and bio research.”
He intimated that Cognos would serve as the “tip of the iceberg” for IBM’s deeper R&D capabilities.
To show that it’s hitting the ground running with its latest acquisition, IBM also announced 10 new and enhanced software packages for the banking, retail, health care, government, life sciences and manufacturing vertical industries.
In addition, six preintegrated packages bring together IBM and Cognos’ software and hardware and a new Information On Demand Infrastructure Services offering to help companies plan, design and deploy an enterprisewide data, storage and content management system, company officials said.
An Architectural Approach
IBM said it plans to involve the Cognos team in the ongoing research taking place within IBM’s mathematics department, an area historically focused on improving supercomputing but now examining aspects of data and information on demand.
“What I see happening is computing is becoming much more valuable as a tool to be used by many more people,” said IBM Fellow Brenda Dietrich. “If we are able to capture the mathematics that are well-posed, then it opens the world of mathematics to everyone, not just the geeks among us, and people can make better decisions.”
On a broader scale, IBM plans to couple its technology with that of Cognos to offer an architectural approach to Information On Demand and its corollary, performance management.
“Information On Demand is about unlocking the business value from information. It’s all there, it’s about making things better. It might be about doing human resources automation or work force automation, but they fit hand in glove with an architecture that starts from the top,” said Ambuj Goyal, general manager of IBM Information Management Software. “When we ask clients, ‘Do you have an application agenda?’ and we get inconsistent answers, that’s where the growth is.”
Goyal said there are any number of approaches to the starting point of an architecture-customers might purchase ETL (extraction, transformation and loading) tools, BI software or reporting tools-but ultimately clients are looking for a solution. “So you will see us do a solution-master data management, or information warehouse,” Goyal said. “You will see us talk about individual products, but each one of them [is a way] to implement an architecture. So if you start with MDM and tomorrow you want to add BI, it’s the same metadata shared across it.”
Moving a Shared History into the Present
IBM announced its Information On Demand strategy-a compilation of software, hardware, research and services designed to help companies manage data and content to gain insight and optimize business-in February 2006 and has since invested about $1 billion in building out the division. Prior to the formal launch of IOD, IBM had already acquired a number of companies: Ascential Software, Trigo Technologies, DWL, SRD, Venetica, iPhrase Technologies. As IBM put the IOD wrapper around its data strategy, it continued acquiring companies to add to the mix. From 2005 to date IBM has acquired LAS (Language Analysis Systems), Unicorn Solutions, FileNet, DataMirror, Princeton Softech, Solid Information Technology and, most recently, Cognos.
With similar BI acquisitions under their collective belts (Oracle acquired Hyperion in March 2007 and SAP acquired Business Objects in January 2008), IBM, Oracle and SAP will battle it out for supremacy in the fast-emerging performance management market.
Since IBM has had a longstanding partnership with Cognos, a relationship that has spanned 15 years, both groups have been able to at least start to bring their product portfolios together relatively quickly.
The 10 new industry solutions include an expansion of the IBM Retail Integration Framework to incorporate Cognos’ Store Operations Planning Blueprint, which has been preintegrated with IBM’s retail data models. At the same time, the Cognos 8 BI “starter pack” for IBM InfoSphere Warehouse and distribution of InfoSphere Warehouse with Cognos 8 BI have been combined.
The Cognos 8 platform has also been preintegrated with IBM’s Information Server software platform, which brings about data integration and quality capabilities and metadata integration for better data lineage. This in turn helps companies track the basis for business decisions (key in areas like governance, risk and compliance).
IBM and Cognos have also developed preconfigured templates for integrating Cognos 8 BI with IBM FileNet Business Process Management software.
At the same time, IBM’s Dashboard Accelerator starter kit has been bundled with Cognos 8 BI to help users quickly build portal-based dashboards.
Finally, IBM plans to include Cognos 8 BI software with its IBM Balanced Warehouse C-Class, which provides integrated system components of IBM data warehouse software, server and storage technologies for small and midsize businesses.
The IBM acquisition is also transforming IBM Global Services, albeit on a much smaller scale. While the Cognos services team will become part of IBM’s Lab Services division, a group focused on providing deep technology expertise, IBM Global Services will focus on expanding its services around Cognos in a number of vertical markets, including retail, finance and the public sector, according to Mike Schroeck, global BI leader for IBM Global Services.
That said, IBM will continue in its mission to be the “Switzerland” of business services.
“We have a very large services practice that includes Business Objects, now SAP, Oracle/Hyperion and Informatica,” Schroeck said. “Our goal will continue to be very objective and we will continue to leverage what clients have. But we certainly expect [that] demand for our services around Cognos will increase. IBM continues to aggressively expand Cognos.”
But with all the synergies between IBM and Cognos and the two companies’ long history, the question has been asked, Why did IBM bother to acquire Cognos rather than just continuing the partnership? The answer lies mostly in the similar, and very competitive, acquisitions by Oracle and SAP.
“The world has changed. And that’s really what caused the relationship between IBM and Cognos to elevate,” said former Cognos CEO Rob Ashe, who will now lead the Information On Demand group (in this move, Ashe has jumped from managing 4,000 people to 35,000).
“Performance management is going to become pervasive and the missing piece has always been a trusted data source-a smooth surface customers can get into and access that data whereever it might be … and to make sure data is coming from the right place, and is going to be put in the right place and there’s lineage behind it. IBM’s IOD platform vision strategy and Cognos’ strategy for performance management and business optimization just fit hand in glove. It’s really what’s going to differentiate us from the other acquisitions in the market,” Ashe said.