Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

And then there were three: Cognos buys Applix

by
12th Sep 2007
Save content
Have you found this content useful? Use the button above to save it to your profile.

With seeming inevitability, the last remaining independent OLAP database developer Applix has received a $306 million offer to become part of Cognos, one of the world's leading business intelligence software combines. John Stokdyk reports

Cognos indicated that it saw the Applix applications as complementary to its own and CEO Rob Ashe said in an official release that the deal would be a major step in the company's strategy to deliver financial and operational performance management solutions.

For its money, Cognos will get its hand on a profitable organisation with an estimated annual turnover of $61.2 million, with a healthy 45% growth rate. Applix has 3,000 customers around the world and is rated as a "visionary" in the Gartner "magic quandrant" analysis of the corporate performance management (CPM) marketplace.

The deal is expected to complete by the end of the year and follows Oracle's $3.3 billion acquisition in March of Hyperion, the owner of the Essbase multidimensional database. With Applix's TM1 system in-house, Cognos enters the same league as Oracle, and Microsoft, which has built online analytical processing into its SQL Server database management system.

In recent years, however, Applix has made less of a fuss about the underlying technology and developed a profitable niche business by focusing on implementing analytical applications that cater for specific tasks such as financial and production planning, consolidation and customer profitability analysis.

Applix has strong links with Excel and has created an effective web-based planning, budgeting and forecasting suite, documented earlier this year in a case study on planning at Diageo. While there are some product overlaps, for example in planning and consolidation, getting access to Applix's financial application expertise was seen as a positive move by Gartner research vice president Nigel Rayner.

"Applix has a long history of OLAP-based business intelligence and has done very well selling performance management applications in addition to its toolset. They've got a good distribtuion channel that can sell solid finance-oriented analytical applications. Some Cognos channel partners don't have good CPM knowledge and struggle to sell to CFOs. This deal is going to strengthen that channel," Rayner said.

The Gartner analyst commented that the current Cognos Planning product, while very functional, was shackled by underlying technology that was becoming "a little dated".

He explained: "TM1 is quite interesting technology and gives them much stronger calculation capabilities. Over time we think Cognos may use that technology as the foundation for a new planning product."

TM1 is a 64-bit database, which greatly expands the amount of data that can be held in the computer's random access memory, making queries quicker and allowing users to correlate a greater number of data sources and types. For example, in financial consolidation, Gartner is now recommending that groups use a regional consolidation approach, where rather than having five users at head office using the system, hundreds or event thousands of finance staff might access it.

"If you do that, you need a massive consolidation system and a 64-bit database certainly makes a difference in that context," Rayner said.

While not having access to a robust multidimensional database engine like TM1 could have "given Cognos some challenges", Rayner does not consider owning the underlying OLAP database engine to be such a big issue. "There's less focus on OLAP as a concept and more it as an enabling technology now," he said. "The important thing is the applications and how they can be used. The OLAP engine is just part of the business intelligence and analytical platform - nobody cares about it. Customers are more concerned about the business plan - has the supplier got the tools to meet their reporting needs and can they back them up with analytic applications for budgeting, sales forecasting and so on?"

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.