BI mergers build mega vendors

Customer demand for standardised business intelligence solutions and better integration of performance management tools is driving rapid consolidation in the business intelligence sector.

So says Peter Kokinakos, director of marketing Asia Pacific at Cognos, adding "The landscape is changing in a huge way.

"Customers are telling us they want to consolidate application skill sets and reduce expenditure on support costs. They are saying that they only want one or two [fully integrated] solutions, rather than, say, a whole heap of applications or tools that do different things [and that have to be plumbed together]," Kokinakos says.

Resultingly, Kokinakos feels that his competition - namely Business Objects which acquired Crystal Decisions, and Hyperion which acquired Brio this month - have been on a shopping spree for capability, customers and talent to bolster their offerings.

Kokinakos says the Brio deal effectively leaves three major players (Cognos, Hyperion and Business Objects) in what analysts are now calling the "performance management" space, be it corporate (CPM), business (BPM) or enterprise (EPM).

One obvious area where such performance management vendors will aim newly consolidated products is that of analytics and reporting which so-called mega-solutions vendors such as PeopleSoft and SAP are touting. While such vendors have also been trying to build in new analytics capability to their existing offerings, the view from the performance management hill is that this too often comes as a value-added solution from a smaller vendor, with high integration cost and sub-optimal fit.

"These companies are now a threat to mega-vendors [like People Soft or SAP]. They are better poised to deliver integration and rich interfaces [than mega-vendors]. That's their bread and butter; that's what they do best and have been doing all along. We're seeing a maturing market, so it makes a lot of sense," Kokinakos says.

Yet while Cognos started the BI-cum-performance management gold rush in January, acquiring Adaytum for the sum of $US157 million, Brio's $US142 million price tag was too steep, Kokinakos says.

"We looked at it…and basically they wanted too much money so we walked away. But there is going to be a lot more movement in this space before the dust settles."

Cognos was formed in 1969, is publicly listed on the Nasdaq and Toronto Stock Exchange and holds three of the big four banks in Australia, the ATO, Shell and Pirelli as clients.

SSA acquires Baan

Consolidation in the enterprise application space appears to be picking up a full head of steam as SSA Global Technologies announced last week that it will acquire Baan, a 25-year-old ERP company.

SSA Global Technologies, based in Chicago, targets manufacturing, services, and public sector with a range of ERP applications and CRM, supply chain management, and business performance software.

SSA chairman and CEO Michael Greenough said that SSA will be able to extend its strength in audit-to-cash cycle with Baan's strengths in ERP extensions such as supply chain, advanced planning, and CRM.

Baan, a wholly owned division of Dutch company Invensys, offers similar software and services to discrete manufacturers in the industrial machinery, electronics, automotive, and aerospace sectors.

"It gives SSA a well-respected solution in the discrete industry and good channels to market in Europe where SSA has not been as strong," said John Moore, vice president and general manager of enterprise services at ARC Advisory Group.

While SSA claims about 10,000 licensees, Baan has about 6500 with combined licence revenues of aroound $160 million.

According to Moore, SSA has been on an acquisition spree in which it picked up InterBiz from Computer Associates and Infinium, a process ERP solution.

"A lot of the solutions it has been buying are based on the IBM AS/400 stack, a mid-tier play, but Baan gives them a technology stack in the Microsoft environment," Moore said.

- Ephraim Schwartz

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More about AdaytumARC Advisory GroupBaanBRIOBusiness ObjectsCA TechnologiesCognosCrystal DecisionsIBM AustraliaInfiniuminterBizInvensys GroupMicrosoftPeopleSoftPirelliSAP AustraliaSSASSA Global Technologies

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