In a career like business writing, where you sometimes make predictions about the companies you cover, your words often come back to haunt you -- or at least serve as proof that you are not all that smart. (Financial analysts have the same problem.)
Case in point: these excerpts from a blog written by yours truly titled BI Pureplays Won't Go Away:
While there are sure to be more BI acquisitions, there will always remain a place for pureplays like Business Objects... The BI pure players claim it's easier to integrate their products in heterogeneous environments, and tout this ability as a major advantage over big boys like SAP and Oracle.
You'd think that 20-plus years in journalism would have taught me to avoid use of the word "always" -- but no. Seven short months after I wrote that, SAP announced its acquisition of Business Objects. Then yesterday, IBM said it would purchase business intelligence specialist Cognos for $5 billion in cash.https://o1.qnsr.com/log/p.gif?;n=203;c=204663295;s=11915;x=7936;f=201904081034270;u=j;z=TIMESTAMP;a=20410779;e=i
These buys apparently emboldened BusinessWeek to make a prediction of its own in a current headline, IBM, Cognos, and the End of Best-of-Breed. While there will almost (see, I'm learning) certainly be continued consolidation in the red-hot BI sector as many industry observers predict, "end" is a pretty final term.
BEA Systems and Sybase are two likely candidates for acquisition, notes the article. Oracle made a bid for BEA last month, but withdrew it after BEA said the database giant's offer wasn't good enough -- much to the dismay of power shareholder Carl Icahn, who holds a 13.2 percent stake in BEA.
Two of the few remaining best-of-breed companies, Teradata and SAS Institute, announced a partnership -- not an acquisition -- at a recent Teradata Partners conference. BusinessWeek calls Teradata "probably too expensive for most buyers" and says that SAS CEO Jim Goodnight will resist selling the company he founded. An AMR Research analyst opines that Sybase doesn't appear to be a good strategic fit for obvious potential suitors such as SAP or Oracle.
BusinessWeek and other observers largely agree that Cognos is a good buy for IBM. Mark Smith does find a few bones to pick on the Ventana Research blog, including IBM's positioning of Cognos in its Information Management division, a move he calls "precarious" in light of the division's inexperience with BI and Cognos' licensing agreement with Informatica, a provider of competitive technology. Smith writes:
My predictions for IBM is that they will in 2008 see they will need to re-organize their planned acquisition of Cognos and placement under Information Management into a separate brand or into a new unified brand that highlights Cognos and not buries it into the existing product portfolio.
Smith also suggests that either HP or Teradata may be next to make a BI purchase, and mentions Informatica and MicroStrategy as possible targets.
BusinessWeek hints that the flurry of deals may not mark the "end" of best-of-breed companies at all, noting that "there's always something disruptive coming" in the software industry. Its pick in the BI sector is QlikTech, which offers "radically different technology" that makes it possible to load data into a computer's RAM for nearly real-time analysis.
QlikTech has been attracting plenty of industry attention with the widespread move from 32-bit to 64-bit processor technology. In an interview with WhatPC?, QlikTech exec Andy Honess says the traditional approach to BI, which tends to rely heavily on data warehouses, OLAP technology and front-end interfaces like dashboards, hasn't kept up with companies' changing needs.
This integration results in a lot of cost and complexity and also means you can only analyze a snippet of the whole corporate world.
QlikTech's approach had attracted 3,500 customers at publication of the May 2006 interview. Honess claims it cuts the typical deployment time of a BI project from 17 months (a statistic drawn from a DMReview study) to a week.
QlikTech is reportedly planning an IPO, though its chairman, Mans Hultman, preferred not to comment on those rumors in a Computer Business Review interview. Hultman cites company growth rates of 77 percent in 2005, 80 percent in 2006, and 85 percent thus far in 2007.