made a big splash in the competitive business intelligence software sector Wednesday when it announced it would acquire Applix
for $339 million in cash.
Cognos, which competes with the likes of Business Objects
in the $6.25 billion business performance and analytics software market, said the deal is expected to close in the fourth quarter pending regulatory approval.
“This acquisition is a terrific strategic fit for Cognos,” Cognos CEO Rob Ashe said in a statement. “Applix will broaden our solution offering and provide Cognos with an innovative, 64-bit, in-memory analytics capability.”
By adding Applix and its TM1 multi-dimensional Online Analytical Processing (OLAP)
Cognos said its customers will now have access to improved analysis and optimization of large, complex financial performance data, beefed up self-service capabilities such as business rules management and new features like profitability analysis.
“What’s interesting about the deal is it gives Cognos the potential to really focus on finance professionals, making their offering that much more complete and therefore more differentiated from standard budgeting, planning and performance-management tools out there,” Rob Kugel, senior vice president at San Mateo, Calif.-based Ventana Research, told internetnews.com.
“They can bundle up TM1 with their Planning and Controller applications or any number of analytical applications to give finance organizations a quick and easy-to-deploy application to do all kinds of simple and complicated analyses without having to go into spreadsheets,” he said.
Cognos shares fell 68 cents to $40.40 Wednesday afternoon while Applix shares stormed up $3.21 a share, or 22 percent, to $17.58 following the announcement.
In July, IDC reported that Cognos, which ranks third behind Business Objects and SAS in total share of the business intelligence software market, actually lost a tiny bit of ground last year, falling from 10.1 percent to 10 percent of market share on sales of roughly $622 million. Business Objects controlled 14.3 percent of the BI market compared to 10.9 percent for SAS.
Meanwhile, Oracle, buoyed by its March acquisition of Hyperion, now holds about 8.5 percent of the market and Microsoft increased its share by a full point last year to 7.7 percent.
“With any deal like this, it really comes down to what will Cognos do with this now that they have it,” Kugel said.