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Q&A: Why Cognos is Bullish on 2005

For Cognos, 2004 was a big year, but officials say customers haven’t seen anything yet

• By Stephen Swoyer
• January 12, 2005

For BI giant Cognos, 2004 was quite a year. The company updated its flagship ReportNet product, revamped versions of its Impromptu, PowerPlay, and Metrics Manager products, and made a first foray into the Linux space.

According to Karen Williams, vice-president of marketing for enterprise BI with Cognos, customers haven’t seen anything yet. This year the company will roll out a new Series 8 release and emphasize BI tools standardization. The upshot, she promises, is an interesting year, to put it mildly.

If I had to pick the most salient trends of 2004, they’d be—in no particular order—compliance, performance management, data integration, and the continued importance and ubiquity of reporting. Do you think the same things will be prominent in 2005, or are any other emerging trends on your radar screen?

I think standardization is a trend that’s key in business intelligence for the coming year, and we’ve seen that trend pick up later last year. It’s not just vendor push. It’s also customer pull. Standardization was something that this year all of the vendors started to discuss, but customers are looking to create the standard.

A lot of the reason is that they’re trying to reduce the complexity, they’re trying to get more value for their business users, and they’re trying to reduce costs. But one of the key technology drivers that allows them to do that is that vendors like Cognos have a single architecture that you can standardize on to get all of the products you used to get as point solutions.

I’ve heard a lot of vendors—predictably, large vendors like Cognos that market end-to-end BI platforms—pushing standardization, but I’m wondering if it’s really something that you think is practical for all customers. I mean, can all or even most of your customers afford to rip-and-replace their point solutions and standardize on a single platform offering from Cognos—or any other vendor?

Our recommendation is that they stage their approach. It’s more [invest in] new applications, and then as older applications mature, replacing them. It’s not a take-everything-out-that-you-currently-have-and-put-this-thing-in-new, it’s take the standard that you want to move forward with that meets your requirements across the organization. It’s start with new applications and then as applications mature, if you want to move off of a certain type of product or vendor because they don’t’ support you, do it then. That way you slowly evolve into your standard.

Any other trends you think will figure prominently in 2005?

Web services are obviously maturing, and service-oriented architectures. From a technology perspective, both are things that people are starting to use, work-with, have practical usages for. We have an SOA … that is Web services- based, and people will start to leverage those in the coming year.

Last year was a relatively quiet year, consolidation-wise, in the BI space. At the same time, it should be said that Cognos, along with Business Objects, Hyperion, and possibly SAS, consolidated their positions as the largest purveyors of end-to-end BI platform solutions. Do you think we’ll see some shake-ups in 2005, as some of the smaller players who’ve traditionally concentrated on BI point areas are acquired or otherwise marginalized by this ascendant gang of four?

I think you’re right from the marginalization perspective. The smaller vendors tend to have niche areas that they focus on, and because of the breadth of offerings that the bigger vendors now focus on, I think it becomes harder and harder for them to get any traction, because unless you’re talking about very a narrow niche, they don’t meet the requirements. They tend not to have the global reach, the support for multi-byte, the sales organizations, all of the things that allow you to have a global organization.

The big names are getting bigger and having different types of conversations around corporate performance management and planning and all of the other pieces that they don’t have as part of their portfolios. Most organizations have multiple vendors that they’ve bought point solutions from, and as they look to consolidate, some of those vendors will not have a business in the future.

We’re starting to see many of the big ERP vendors encroach into the BI space, citing natural overlap between their own products and BI functions in many respect. Should this be a cause of some concern to Cognos and other BI vendors, or is there a chance for healthy co-opetition?

It’s definitely an environment for co-opetition. If you take someone like Oracle, they’ve just made an announcement, but of course we support all of the Oracle database platforms. We’ve worked with Oracle for many years because they have one of the most popular database platforms. SAP—we have one of the highest rates of certification with the NetWeaver platform of any BI vendor, and of course, admittedly, they have their own BI piece as well. There’s PeopleSoft—they have their EPM piece, and they have applications. It’s been there for a while and there are going to be areas where we work together and areas where we compete, and I think we’re in an excellent position moving forward to do both of those thing with all of the different ERP vendors.

Some of the analysts I’ve spoken with point out that we still haven’t seen any really large deployments of ReportNet, you know, in the neighborhood of tens of thousands of seats. Now you did publish a benchmark that showed ReportNet scaling to more than 100,000 seats, but are we starting to see more customers come online with very large deployments?

Certainly we have some large deployments, but it has taken a while.

And ReportNet has been on the market for just over a year at this point.

That’s right. It does take a while to get to those size of deployments, but we do have some large ReportNet deployments from a global perspective. I don’t have any specific customers to share with you, but I can say that we are starting to see much larger deployments.

You announced a new version of Impromptu, your classic end-user reporting tool, in August. It was my understanding that ReportNet was introduced in part as a replacement for Impromptu. Have you had any success in selling existing Impromptu customers on the benefits of moving to ReportNet?

ReportNet replaced Impromptu, yes. It has more functionality, it’s a totally different paradigm, so it’s a replacement for [Impromptu]. But we haven’t actually tried to convince our Impromptu customers [to move]. The approach that we’re taking is we’re going to support Impromptu for a long time to come, and that there will be new releases of Impromptu and Cognos Query as we move forward. However, if they’re interested in moving to ReportNet, we have a full set of migration tools and services, as well as policies of like-for-like functionality, so basically our customers have choices. They can move now or they can wait.

I mentioned I thought data integration was an important trend in 2004. I believe you have an ETL or data integration offering, DecisionStream, but I never hear [your company] talk much about it. With the commoditization of ETL and the emerging importance of data integration, have you given any thought to more aggressively enhancing and/or promoting this offering?

We actually do have a lot of DecisionStream customers. It gets sold with many of our business intelligence deals. The reason that you don’t’ hear too much about it is that essentially we use it in support of our BI. We’re not out there selling it as an ETL. We also have partnerships with Ascential, we have partnerships with Informatica, [and] we have an Open Data strategy, so if you’re looking at creating a BI data mart that’s ready to go for BI, we have the data integration piece that allows you to do that. [I]f you have Ascential and they’re your vendor of choice, or you’re working with Informatica, you can do that. We’re not out there promoting DecisionStream as an ETL tool, but we are using it in a lot of accounts where they don’t already have preferred providers. It will be part of Series 8 when we launch that, too.

Speaking of Series 8, when can we expect that deliverable? It’s promised for sometime this year, right?

This is going to be a really exciting year. In the summer timeframe, you can expect to see Cognos Series 8, and that’ll be inclusive of ReportNet and PowerPlay, and Cognos Metrics Manager, and all of the pieces will come out in that big release. We’re really looking at quite a bit of user functionality in order to extend our capabilities across the product line, so there’s many user things for what we have planned for Series 8.