IBM buys into the business intelligence trend

IBM has followed the lead of rivals SAP and Oracle

IBM’s $4.9bn (£2.4bn) purchase of business intelligence (BI) specialist Cognos is bringing the supplier in line with its major competitors.

BI software is a key tool for major service providers pitching to large corporate customers, and some of IBM’s biggest rivals are already onboard. SAP bought Business Objects for €4.8bn (£3.38bn) in October. And Oracle paid $3.3bn (£1.6bn) for Hyperion Solutions in March.

It was only a matter of time before Big Blue followed suit, according to Ovum analyst Helena Schwenk.
“It was the last of the major infrastructure players without a convincing BI story ­ the moves by SAP and Oracle meant that IBM had to act now,” she said.

BI is a growing market. Most large companies have invested heavily in infrastructure technology, but they need BI software to extract data faster.

The coming months are likely to see similar moves from other big suppliers. HP and EMC, for example, still have no significant BI capability and there are a number of viable niche suppliers still in the market.

“Of the remaining vendors, the potential candidates for purchase could be Microstrategy, Panorama, SPSS or Informatica,” said Schwenk.

Cognos was a natural target for IBM because the firms have worked closely since last year’s formal strategic relationship.

“Cognos’s market provides a natural complement to IBM’s back-end information management and integration capabilities,” said Schwenk.

The combination of services means customers do not have to deal with multiple vendors and systems integrators.