IBM gets closer to Cognos with global SOA alliance

IBM Corp. and analytics software vendor Cognos Inc. have signed a new global strategic alliance around service-oriented architecture (SOA), the companies announced Tuesday. The relationship builds on an already close partnership between the two firms to include more joint development, sales and marketing in the SOA space.

SOA is a way to create and manage IT systems through reusable software and services.

Under the extended alliance, the two companies will continue work on integrating IBM middleware and Cognos business intelligence software as well as embark on more vertical product integration, said Rupert Bonham-Carter, senior director, IBM Alliance at Cognos. Industries of particular interest are the insurance and public sectors as well as financial services, banking and manufacturing, he added.

The new relationship covers all geographies, all IBM brands and divisions and is cross-industry, according to Bonham-Carter. Partnering with IBM on a worldwide basis will definitely help Cognos target emerging markets, he said.

IBM limits such alliances to a very small number of independent software vendors (ISVs) and the relationship is likely to result in increased revenue for Cognos, according to John Hagerty, an analyst with AMR Research. The new alliance is equivalent to the move from "dating to getting engaged," he said. The analyst didn't rule out a future marriage between IBM and Cognos.

"We believe IBM needs to beef up its reporting and analytics capabilities," Hagerty said. "We assume Cognos would be a logical acquisition to make in the future." In recent months, IBM has purchased a number of its partners in the SOA arena. However, given the current high valuation on business intelligence players, IBM may ultimately decide to keep its relationship with Cognos as a partnership, he added.

"Business intelligence is a hot topic on CIOs' lists," Bonham-Carter said, "There's bound to be speculation." Both the Cognos executive and Hagerty also pointed to other large software players that might be interested in making a business intelligence purchase, notably Oracle Corp.

Strengthening ties with IBM should also help Cognos in attracting more attention for Cognos 8, according to Hagerty. Some customers have been slow to move over to the software that debuted late last year and brings together the vendor's previously separate analytics and reporting tools. "It's more a strategic application so customers are adopting more of a wait-and-see attitude" towards Cognos 8, Hagerty said.

In its most recent financial quarter, the third quarter of fiscal 2006, Rob Ashe, Cognos chief executive officer, blamed a challenging transition to Cognos 8 as one of the contributing factors to disappointing financial results. Cognos is due to report its fiscal 2006 fourth-quarter and year-end results March 30.

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