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PowerPlay: Cognos Gobbles up Celequest

Not all industry watchers see genius in the deal, but those who do say Celequest gives Cognos some serious dashboard muscle.

• By Stephen Swoyer
• January 24, 2007

Most folks had been waiting for Cognos Inc. to make a move of some kind in the burgeoning Software-as-a-Service (SaaS) space, but few could have anticipated what happened last week, when the Canadian BI giant gobbled up dashboard specialist and appliance Wünderkind Celequest Corp. for an undisclosed sum. Not all industry watchers say they see genius in the deal, but those who do say Celequest gives Cognos some serious dashboard muscle.

Celequest, which was co-founded by former Informatica Corp. principal Diaz Nesamoney, first went live in 2003 as a purveyor of dashboarding software for business performance management (BPM) and business activity monitoring (BAM). Last year, however, Celequest ventured somewhat far afield from its software roots by introducing a scalable dashboard appliance, dubbed Lava. A SaaS play was adjunctive to the Lava announcement—officials positioned Lava as a sort of hosted, SaaS-in-a-box appliance—and Celequest has since notched deals with several prominent services and integration providers.

Cognos isn’t any stranger to dashboards or dashboarding, of course. But it is a newcomer to SaaS. And—with rival Business Objects SA having followed up its first tentative step into SaaS (CrystalReports.com) by acquiring a full-fledged SaaS hosting provider—there’s a sense in which Cognos was under pressure to do something SaaS-wise. Celequest, with its SaaS-based reporting and dashboarding offerings, gives it a pre-fab SaaS strategy. A unique pre-fab SaaS strategy, says Leah MacMillan, vice-president of product marketing with Cognos.

"Our foray into SaaS to date has really been through our partnerships. We have a lot of partners—like Concur, Infor, Solutient—that use Cognos 8 in a hosted environment," she indicates. "Celequest gives us our first native SaaS offering. It [Celequest SaaS] is absolutely something that’s unique. It’s great for channel partners who really like the ability to get something up and running very quickly for their customers. It’s also very helpful for us in broadening our offering for customers who don’t have sufficient IT resources to do that themselves."

Hand’s-on analyst Cindi Howson, a principal with BIScorecard.com and a member of TDWI’s extended research collaborative, says the acquisition is a savvy move for Cognos. First of all, she notes, Celequest gives an instant shot-in-the-arm to Cognos’ dashboarding capabilities. Given parallel moves by Cognos’ competitors—including Business Objects (with its Dashboard Manager and Xcelsius offerings), Microsoft Corp. (with its acquisition of the former ProClarity Corp.), and MicroStrategy Corp. (which plans to launch its own next-gen dashboard sometime in Q1)—that’s a good thing, Howson says.

Secondly, Celequest brings a lot more to the table than just its dashboarding capabilities. There’s SaaS, the Lava appliance itself, and Celequest’s in-memory analytics engine, among other features. Depending on how Cognos chooses to evolve them, these features could figure prominently in future revs of the company’s bread-and-butter BI and PM suite.

MacMillan, for her part, says Celequest helps shore up Cognos’ ability to address operational reporting scenarios.

"We really saw their operational dashboarding technology as a nice complementary fit within our portfolio. We thought they helped us reach a new class of user with a new kind of product. With their options around SaaS and bundling their solution as an appliance, it also helps us deliver our offering to new channels," she indicates. "This is a nice complementary fit. It enables us to deliver the full spectrum of dashboards—that real-time operational dashboard, being able to track inventory and make decisions on a second-by-second basis, through to the strategic management dashboard which we’ve always done."

Not everyone says Celequest is a slam dunk for Cognos. Consultant and data warehouse administrator Mark Madsen, who—like Howson—is a member of TDWI’s extended research collaborative, says he’s puzzled by the move.

"They seem to be stressing the real-time BI-side product as the major reason for the acquisition, with some talk about their managed deployment and SaaS model. I don't see the latter giving Cognos anything," he comments. "The SaaS offering is only a partial solution aimed at reporting, so their business model won't scale without some serious focus on the remaining portions of the BI technology stack. They have the BI appliance, but still need other components to get data in, store data, and manage the infrastructure, and those aren't addressed."

There is upside to the acquisition, Madsen concedes—it’s just a question of how Cognos plans to exploit it. "The primary gain for Cognos would be [Celequest’s] simpler-to-use dashboard software and [the] better real-time BI and dashboard features in the Celequest software," he concludes. "[But] since [Celequest is] continuing as a wholly-owned subsidiary, it's not clear to me what Cognos' reasoning is. I don't see this selling more Cognos software since it wouldn't make sense to ship Cognos preinstalled on a blade and call it an appliance."