New Landscape, Same Story

At some point during the 2007 acquisition spree that consumed Hyperion, Business Objects and Cognos, observers logically turned to prospects for a remaining independent business intelligence (BI) vendor, Information Builders (IBI). If not as big as sometime competitor SAS, IBI is one of the bigger privately held independent software vendors (ISVs) left on the planet and in some ways is a more mainstream provider of BI and integration tools. A savvy businessman who doesn’t couch his intellect in MBA-speak, IBI CEO and founder Gerry Cohen has kept his company a formidable competitor, and a steady stream of new customer announcements has done nothing to lessen that image. Cohen won’t predict an end game to the BI vendor puzzle, but he remains a happy warrior for the cause, as DM Review Editorial Director Jim Ericson recently found.

DMR: Gerry, what is it like to be running a big business intelligence ISV these days?

Gerry Cohen: In some ways we’re thinking that the landscape is totally different, that the business has suddenly changed and we’re competing with different people and doing different things. In other ways, well, what’s the difference? We’ve always had big and little competitors. The thing that changes now is that we have more competitors owned by bigger guys. For the last 10 years, we’ve competed with a spectrum of companies and gotten to know them. Ford competes with Chrysler and GM, and all of a sudden they’re competing with Toyota and Nissan and Honda; they’ve been doing that for 10 years too. [But] when something comes in that changes things dramatically, everybody feels it.

DMR: What things have changed at IBI as a result of all the acquisitions?

GC: There’s a lot of built-in change this year because things have to be done differently. Years ago, when our competitors were of similar size, you competed on more of a product and technical basis, maybe a feature function basis. Today we’re competing on a service basis, a slightly different return on investment basis, and we’re trying to offer more specific stories for customers that explain why we’re a better choice. Our methods of lead generation are changing, our sales force management is changing, the field process is changing. It’s an evolution, but like they say, you don’t see the grass growing under your feet. Two years from now, we’ll see all we’ve accomplished.

DMR: Because IBI was grouped in a basket of companies including Business Objects, Cognos and, to a degree, Hyperion, some were saying your company was odd man out after all the big acquisitions.

GC: I don’t think we were really a candidate in the acquisition game. We were and are a private company, and only public companies were purchased. In that way it’s a different ballgame. But let me remind you how ephemeral these things are. When Hyperion was bought by Oracle, Business Objects kept talking about how they were going to remain independent and how well that would serve customers. Just a few months later, they were purchased. Then Cognos was crowing about their independence, and a few months later they were purchased. So you never know what’s in store. For 33 years we’ve been doing our own thing, and I don’t see anything changing there. We know the direction we want to travel with the kinds of software we think we can sell and build a much bigger business. However, who knows?

DMR: How do you stand out in a field of bigger competitors?

GC: I’d say the things we are doing with technical releases, new products and customer stories make us more innovative. I’ll tell you one reason I suspect this, though you could challenge it. In the BI space, most systems are sold on a per-user basis with named users. SAS, Business Objects, Cognos all sell this way. By and large, BI companies sell this way. Our systems are mostly sold on an unlimited use basis.

DMR: I’m guessing you’ll say that means you need to create new products to sell more to your clients.

GC: Exactly. The customer wants to distribute [our product] to their customers, or to students in a public organization. I really don’t know how many users we have, but one of our technical advantages is that we do scale to thousands, and most of our licenses are unlimited usage. That means I cannot go back trying to sell new seats. Cognos, for example, is always going back to sell more seats. The only way we’re going to get an upgrade from a guy is if we sell him optional pieces of software. For example, we’re now talking about active reports, mobile solutions and integration with graphs and other projects we’re working on. It’s the same thing we did many years ago with our Focus product that was sold for mainframe servers. At the end of that lifecycle, there were 40 options a customer could buy. What’s happening in the Web business is a similar process. Knowing we’re not going to get more seats forces us to be innovative. We’ve done a lot of things first and seen others copy us.

DMR: I saw an interesting option you are now offering that uses Google Maps.

GC: Right, it’s a simple mashup we decided we could put to work in our world. We have a police department application using our search engine. When a police department looks up anything in their database, it takes a long time. Now they index everything coming into search and then put it into the database. When they search and get a couple of hits, a result might contain an address. The [officer] selects the address and the map shows where a past incident has occurred on a Google map. The guy is looking at activity at a corner or by name; maybe it triggers something in his head or it describes a suspect. He highlights that text, looks in the database for other related information like a scar. The mapping service may be free, depending on usage, and we charge for integration, but how else would the police department use Google maps if someone doesn’t put it together for them?

DMR: How are partnerships working, and are you seeing more activity among midmarket companies?

GC: In the midmarket, we’re seeing a tremendous market with IBM, who resells WebFOCUS as Web Query for iSeries. They are a partner and a competitor, but we have 9,000 customers on iSeries as of now, and we’re adding something like 200 to 300 a week. It gives customers a lot more usage out of iSeries without having to migrate. Another big migration in the midrange marketplace is from iSeries to Windows, and we have a product for that as well, though we compete with more people there.

DMR: Last question. You can innovate but how do you compete with the marketing machines of the megavendors?

GC: I think smaller companies like ours give much better customer service, and we can sell that message. But look, there’s no doubt that Business Objects is going to be dedicated to a million tasks SAP is going to require and it’s probably going to eat up their capacity for other things. I’d think IBM is doing the same with Cognos, selling DB2 with Cognos as part of that stack. It’s just like Oracle. When they sell Siebel analytics, they say you don’t need to use Oracle, but I’ve not heard of an Oracle analytic sale that wasn’t also about Oracle databases. The megavendors just have their own agenda. The independents stand in between, but honestly, we don’t yet have a good indication of where the chips are going to fall or the lay of the land a year from now. But if you’re an IBM shop using Business Objects and IBM is now pushing you toward Cognos, it creates a lot of controversy that gives tremendous opportunities to us, particularly with partners that can’t work with one of the megavendors.