Cognos’ competitors believe acquisition will stem innovation

Cognos’ competitors believe acquisition will stem innovation

Independent BI providers say that consolidation will only hamper new development

The increasing consolidation in the business intelligence (BI) market will slow product innovation, argues BI independents.

Leading independent provider of BI solutions firm, Microstrategy, said that less vendor choice, would mean that that the bargaining position of consumers would weaken, both in their demands for new software capabilities and in their ability to negotiate a best price.

Rowland Adshead, Microstrategy UK country manager, said “freedom of choice forces software vendors to be highly responsive and innovative, because they know they can be replaced at any time in the stack.”

Following acquisition companies often focus on integrating duplicate products, which cuts back innovation time. “The acquired company will be inward looking while it figures out how it fits, which is particularly tricky when they have a large number of products,” said Adshead.

The involvement of the acquired BI vendor in the new parent company’s stakeholder decision making cycles adds further to the slow of innovation, added Adshead.

Jake Freivald, Information Builders vice president of corporate marketing, said large suppliers cannot innovate as quickly as independent vendors because their research and development budgets are diluted across a large number of different technologies.

Gerry Cohen, Information Builders chief executive, said that consolidation would often lead to trade offs, particularly he said, “best of breed for the stack.” While independent BI vendors can integrate with “all types of hardware, operating systems, data sources, and applications,” added Frievald.

Examples of areas mentioned by Adshead in which he sees room for innovation were “new virtualisation techniques that go beyond tables and graphs to help business decision-makers understand their data”, and “new user interface paradigms that allow users to freely explore the data warehouse, like surfing the web.”

Charles Nicholls, chief executive of real time BI company SeeWhy Software, said plans held by independent vendors are diminished as soon they are acquired, adding that “in a single stroke, the product roadmap that your independent BI vendor committed to has gone.”

Nicholls said a vendor’s focus on developing interoperable capabilities will decrease as soon as it is acquired. This contrasts with the statements made by BI vendors about to be acquired and who intend to retain their products as a separate platform that will continue to function well with an IT infrastructure holding competitor’s products.

“The average corporation has more than 20 different types of databases, so any BI tool needs to support a huge range of different ways of accessing data. Most independent BI vendors spend up to 50 per cent of their R&D dollars supporting hundreds of different types of connectivity,” Nicholls added.

“It would be unrealistic for a database vendor to share its development plans with another database vendor for the purpose of optimizing their BI tools,” Adshead added.

Alys Woodward, a programme manager at research firm IDC, agrees that “consolidation stifles innovation because the focus turns to integration,” but still believes larger suppliers will remain innovative.

In order to bring out the value of information, larger firms need to innovate across platforms and applications, whereas the smaller groups “will innovate in pockets,” Woodward said.

End users want innovation in areas such as the ability to integrate volumes of diverse forms, unstructured data, and obtaining real time access to content, Woodward added.

Woodward believes that, “it is good for end users in general that SAP and Oracle focus on BI,” because it shows the importance of the BI arena.

Woodward added that although, following an acquisition, the process of integrating products is off-putting, at least the offers made to Business Objects and Cognos by SAP and IBM end damaging speculation that has occurred for a long period of time.