Cognos will acquire performance management software vendor Applix in a US$339 million deal that will see the business intelligence vendor expanding its reach in the financial performance market.
Applix specializes in business analytics and will particularly bring into the Cognos fold a technology called TM1, a 64-bit, in-memory multidimensional online analytical processing (OLAP) server, Cognos said in a statement.
The deal might well be a competitive move by Cognos against the Oracle-Hyperion team, but the acquisition also signifies a higher level of bringing BI to the enterprise, said Timothy Hickernell, associate senior research analyst at Info-Tech Group.
"It's the evolution of business intelligence to realize and latch-on to some real-world problems and for many years now, compliance and financial governance issues have been at the top of the CEO's list," Hickernell said.
In the past, he said, business intelligence has been used in the area of financial performance as a reactive measure to address issues after the fact or as part of audits and other types of judicial discovery situations.
"It is rather a new trend to think about front ending the processes with these technologies to make it more proactive to prevent performance or compliance problems ahead of time and ensure financial compliance before the fact," Hickernell said.
Cognos plans to integrate Applix TM1 with its Cognos 8 platform, which includes Cognos 8 Planning, Cognos 8 Controller, and Cognos 8 Business Intelligence.
The acquisition will also add some 3,000 Applix customers to Cognos' existing customers, including about 3,500 users of Cognos' financial performance management software and over 20,000 using other products from the Ottawa-based software vendor, Cognos CEO Rob Ashe said in a conference call Wednesday.
Cognos could not be reached for comment at press time.
Info-Tech's Hickernell said the deal is in line with Applix's market strategy to expand its performance management capabilities beyond financial data and into operational data. The Cognos acquisition provides that opportunity, the analyst said, as the BI vendor has been a significant player in the enterprise operational data management space.
"Cognos has been a tool that has, for many years, been used by a lot of industries for analyzing operational data especially in manufacturing, utilities and other very operational-oriented types of industry," he said.
In addition, Hickernell said, the Applix buy will give Cognos and its customers the ability to understand business performance management as it applies and benefits business operations.
Integrating the two vendors' technologies is only part of the challenge for many technology merger and acquisition situations, said Hickernell. The two companies will also have to look at inconsistencies in their licensing and pricing structures.
"That is always the delicate dance for any merger or acquisition because you usually have a lot of installed base that are used to one way of licensing than another," he said.