Business Objects, Cognos CEOs Speak Out On Hyperion AcquisitionBusiness Objects, Cognos CEOs Speak Out On Hyperion Acquisition

Oracle's planned $3.3 billion acquisition of Hyperion Solutions, announced Thursday, leaves just two big standalone BI vendors, Business Objects and Cognos. Both offer a broad range of capabilities, and would be a good buy for any big IT vendor looking to get into business intelligence in a big way.

Are any acquisition talks under way? Their CEOs aren't saying, but they don't talk like executives who expect to be absorbed by a big company anytime soon.

For Business Objects CEO John Schwarz, the Oracle acquisition spells relief. His company, the largest independent BI vendor with $1.25 billion in revenue last year, was considered a target -- Schwarz won't comment on any talks he had with Oracle -- and that raised a lot of questions from new business prospects. "It's been a constant source of irritation for me," he says. "When we went to get down to business, the first question was, 'Who is going to buy you?' Now that's out of the way, we can get down and do business."

Not that it's over. Either Business Objects or Cognos would fetch at least $3 billion, leaving just a handful of possible suitors: EMC, Hewlett-Packard, IBM, Microsoft, or SAP. Each one has been expanding its business-intelligence portfolios through acquisitions that, so far, have been mostly small.

Schwarz says further consolidation is a given, as companies playing in BI will be under constant pressure to deliver more options to customers. Business Objects has acquired seven companies specializing in various areas of business intelligence and performance management in the past three years, including the $820 million purchase of Crystal Decisions, $100 million acquisition of SRC Software, and $69 million acquisition of FirstLogic. And Business Objects isn't finished acquiring, assures Schwarz. "There is an urgency and emphasis on this technology," he says.

Most research firms peg the BI market growing at a healthy clip of 10%, while IT budgets overall are expected to grow in the 6% to 7% range this year. The way Schwarz describes it, businesses are largely standardized on ERP and supply chain applications, and now they're shifting dollars over to applications that can be used on data collected by these systems, databases, and other sources. "Most organizations are under tremendous pressure to improve their performance," he adds.

Business intelligence isn't new technology, but the front-end tools are becoming easier to use, making them accessible to more types of workers. Customers today are asking for broad packages, including modeling and predictive analysis tools, dashboards and scorecards for managing processes and workflows, and data integration tools and servers. "They want them to be relatively integrated, and they want them to be open and heterogeneous," he says.

Business Objects dominates traditional BI, but its performance management offerings are slim -- a problem it's trying to resolve through acquisitions. Its closest competitor, Cognos, has long pushed both BI and performance management. "Our strategy is to be the leading independent provider of performance management solutions," says CEO Rob Ashe. "One of the independents leaving the market gives us the opportunity to do that."

Ashe also won't discuss whether Cognos is in any acquisition talks, but he extols the benefits of keeping BI separate from a vendor-specific software stack. "Independence is really important," he says. "Customers share their data in many different places."

As demand for BI grows, Cognos has been working with system integrators to develop more industry- and role-specific offerings. A new product called Go Mobile, for example, lets different types of employees access BI from the road. Think of a traveling pharmaceutical salesman who needs to call up data while in a doctor's office, he says, or an executive crunching numbers on her BlackBerry.

Only time will tell if Business Objects and Cognos can keep going at it alone. Either their CEOs have mastered the poker face, or they truly believe independence is best for everybody.

This story was updated March 5 to correct the purchase price of Crystal Decisions.