Ideas to Income BLOG

Can it really take 39 Years to M&A? - Just ask Cognos

Sometimes it's easy to forget how long it takes to build a great software company. Case in point Cognos. It's hard to believe that while Neil Armstrong was doing his moonwalk, Ottawa-based Cognos was starting up in 1969. At the same time, the first wave of mainframe computers were hitting the market. And while Cognos had a 38-year run, it is now officially moving over to "Big Blue." Yes, this week IBM announced that it is spending $4.9 billion to acquire Cognos. The deal follows a spree of acquisitions by both Oracle (Hyperion Solutions); SAP (Business Objects) and Microsoft (ProClarity).

With the acquisition of chip maker ATI (acquired by AMD) and DataMirror (also snapped up by IBM) still fresh on many people's minds, some pundits will no doubt lament the sale of yet another Canadian high tech company to a major US player. However, the move looks to be a smart one for Cognos. The business intelligence software category is maturing and it has become a gorilla game. Cognos has been under some stiff pressure to compete in many of its market segments, while IBM needed a quality BI acquisition.

They have traditionally relied on partnerships with data warehousing and BI software players to serve an estimated 500,000 global customers. But there is only so long a major player as integrated as IBM can watch on the sidelines in such a lucrative market. Cognos gives IBM a richer product suite and should nicely compliment its data warehousing unit. And while Cognos has traditionally built a beautiful product, given the recent consolidation plays, it's tough to say whether Cognos could go it alone in the long run.

Congratulations to Rob Ashe and the Cognos folks (numbering 1,500+ people in Ottawa and 2,140 employees elsewhere) for a great run so far. We have to admire how this company has competed at a global level. And here's hoping that Cognos will continue to expand as part of its newfound IBM family. Yes, 1969 was a very good year indeed.

Add comment 2007-11-16 Peter Evans


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