December Data Warehousing Classes
October 30, 2007
ETL is not pervasive yet!
November 8, 2007
December Data Warehousing Classes
October 30, 2007
ETL is not pervasive yet!
November 8, 2007

BI independents get no respect

After SAP announced it was acquiring Business Objects the speculation immediately started about when and who would buy Cognos (COGN).

200pxalbum_no_respectAlthough Cognos might very well be acquired, let’s examine two related arguments that people made. First, they infer that a BI independent company will not survive against the tech titans of Oracle, SAP and Microsoft. Second, when people refer to Cognos as the last major independent BI company they imply that there are not any other thriving or viable firms in the industry.

BI independents cannot survive

Oracle (ORCL) and SAP just spent $10 billion collectively to buy a couple of the top independent BI firms, Hyperion Solutions and Business Objects, during the last year. If the titans were so dominant why did they feel they needed to buy these firms? If the titans are the preferred business choice for BI software why are they ranked # 4, 7 and 8 according to IDC’s 2006 estimates for BI tools revenue?

There is a split personality in business technology purchasing: one side wants to purchase everything from one vendor, the other side just wants to buy the best tool to do the job. It is clear that to date, there are plenty of businesses buying the best rather than just buying whatever their app vendor sells.

Cognos is the last one standing

According the IDC 2006 estimates on BI tools revenue there are five firms with approximately $200 million or more sales that are not the titans or anyone they have acquired to date. SAS was number two, ahead of Cognos, but it seems to be forgotten because it is private. MicroStrategy, Information Builders, SPSS and Actuate have been successful in this market and have had loyal customers for years.

And there are plenty of smaller (less than $100M revenue) BI firms that sell very capable BI solutions. These include companies that you might have seen on industry analysts’ charts such as QlikTech and Panorama Software, as well as those firms below everyone’s radar except their customers such as Dimensional Insight and Board International. All of these BI independents have tools that their customers have chosen over the titans’ products.

Finally, the rise of open source software (OSS) BI, such as Pentaho and JasperSoft, also shows there are market opportunities beyond the titans.


The tech titans have been on a M&A (mergers & acquisition) binge the last few years, but large firms gobbling up smaller ones is not new to our industry. People will continue to launch new, innovative and nimble companies. Some with thrive and some will not. Those that succeed will offer their customers software of value. And maybe they will be acquired eventually only to replaced by newer firms.  


  1. Thanks Rick, but don’t forget about the market shift to software-as-a-service approaches. The on-demand model will be a disruptive force to all aspects of this industry – from how timely and accurate information is delivered to how systems are set-up and used to how companies pay for the service. I’m surprised that this didn’t get a mention in your review of independents. Where’s the respect?

  2. Rick Sherman says:

    Darren, Thanks for the feedback. Approaches to BI such as SaaS (Software-as-a-Service) or On-Demand BI, BI/DW Appliances, memory resident OLAP, OLAP Excel and even tighter Office Integration enable businesses to more cost-effectively deploy and more widely use BI. These innovations appear to be emerging from the smaller BI players rather than the tech titans. The titans often obtain these capabilities through acquisitions. The recent purchases of Celequest and Applix Cognos are good examples of these trends happening at all levels of the food chain.
    The take-away points from my post were, first, that Cognos could, if it wants to, remain and thrive as an independent. Second, there is plenty of companies and plenty of opportunities for BI independents in the marketplace. Finally, that a lot of the innovation comes from these newer or smaller players.
    I am sorry I did not mention your company LucidEra. No slight intended. And there are others that I did not mention.
    I have discussed SaaS/On-Demand, BI/DW appliances and other BI approaches in my writings and will continue to do so. Besides this post: I write monthly columns for DM Review and (TectTarget); write for a separate blog on Enterprise Data Management; am interviewed for various articles; speak on podcasts & webinars; and, write papers.

  3. Thanks Rick! I enjoy your blog and agree with you that analytic innovation is not coming from the traditional enterprise software vendors. They are generally risk-averse and struggle with the innovators dilemma when it comes to their core products. Their customers are still trying to migrate to “new” releases and increasingly their revenues are coming from professional services and maintenance.

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