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Analyst: IBM's services arm an asset for BI

Analyst: IBM's services arm an asset for BI

IBM competitors in business intelligence are likely to look at acquisitions to remain competitive, according to a Forrester analyst.

If implementing business intelligence is more of an art than a science, IBM's Cognos division has a vivid palette at its disposal given IBM's stature as a services provider, Forrester Research analyst Boris Evelson suggested in a recent blog post.

"Now that SAP, Oracle and Microsoft have moved into big time, stack-independent, heterogeneous BI products, it most probably won't be long before they acquire a large management consulting firm with strong BI capabilities," Evelson wrote in part. "SAP, Oracle, and Microsoft desperately need these management consulting capabilities to continue to compete effectively with IBM. If they don't, IBM will always have that one advantage and strong differentiation."

This scenario has Rob Ashe feeling confident. Ashe is general manager of business intelligence and performance management at IBM and was Cognos' CEO before IBM acquired it for US$5 billion in January.

"There's a very significant search for know-how in this area," Ashe said in an interview this week. However, "IBM's already got such significant scale in the services area that it would take a hell of a lot of acquisitions by Oracle and Microsoft to close that gap."

Meanwhile, Hewlett-Packard made a key move when it bought Knightsbridge Solutions in December 2006, Evelson noted.

That deal and IBM's $3.5 billion acquisition of PwC Consulting in 2002 allowed those companies "to take their rightful place alongside with Accenture, CGE & Y, Deloitte, BearingPoint and others as generic, vendor-neutral management consultants with strong BI capabilities," he wrote.

EMC is getting into the BI consulting business as well, evidenced by its move to buy the U.K. firm Conchango in April, Evelson noted.

While the services factor may give Cognos an up-front advantage in the BI market, it still faces an obvious challenge: integrating its BI and corporate performance management (CPM) technologies across IBM's broad catalog.

Ashe equated Cognos to the top slice of bread on a sandwich consisting of its products, IBM's burgeoning portfolio of data-centric middle-tier software, and its hardware and storage offerings. "There's virtually no overlap in that stack," he said.

But James Kobielus, another Forrester analyst, said via e-mail that Ashe needs to integrate the Cognos portfolio with IBM's range of technology "without creating the appearance that they're creating a monolithic proprietary stack or limiting customers' ability to integrate with rival SOA, database, and middleware offerings."


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