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Business Intelligence Merger: Cognos Acquires Applix

Deal meant to boost Cognos’ standing in mid-market financial analysis applications.

September 05, 2007 — CIO —

The decision by Cognos to acquire Applix for $339 million today signals the big business intelligence (BI) vendor’s desire to move into in the mid-market space and to adopt Applix’s analytics technology that helps financial departments view and interact with financial data, according to BI analysts familiar with the deal.

Applix’s online analytical processing—known as OLAP—fills a gap in Cognos’ product offerings. Applix’s TM1, 64-bit OLAP engine takes large data sets, particularly financial data, and intuitively allows users to enter in complex or unique queries. Cognos, whose core products include financial BI products, has offered a similar technology with its Powerplay OLAP, but it has been trailing Microsoft SQLServer Analysis Services and Hyperion (recently acquired by Oracle) Essbase in market adoption, according to Boris Evelson, a Forrester analyst.

“Now [Cognos] leapfrogs Microsoft and Oracle with one of the fastest OLAP technologies on the market,” he added.

The OLAP technology, coupled with Applix’s strong presence in the mid-market, made Applix an attractive acquisition for Cognos, which services some 3,500, mostly large, enterprises with financial performance applications, said Doug Barton, Cognos’ vice president of performance management product marketing. (In total, Cognos counts approximately 23,000 customers.)

Barton added that nearly 50 percent of Applix’s 3,000 customers operate in the mid-market space.

In a conference call with investors today, Cognos CEO Rob Ashe said the integration efforts between Cognos apps and TM1 will be minimal.

The future of Applix’s BI applications themselves will be up in the air for the time being, said Forrester’s Evelson. He added: “Cognos will face the same challenge as Oracle now does with the Hyperion acquisition: establishing a strategy and a road map of overlapping product portfolio integration” or retiring some applications.

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