As reported briefly, Cognos Inc has returned to a strong, profitable position in the market reporting year end profits of $12.3m against losses last time of $9.1m (CI No 1,650). The Ottawa, Ontario company’s senior vice-president of marketing Ron Nordin claims that the strength of the Cognos position compared with other companies such as, say, […]
As reported briefly, Cognos Inc has returned to a strong, profitable position in the market reporting year end profits of $12.3m against losses last time of $9.1m (CI No 1,650). The Ottawa, Ontario company’s senior vice-president of marketing Ron Nordin claims that the strength of the Cognos position compared with other companies such as, say, Oracle Corp, Informix Corp, Ingres Corp and Sybase Inc lies with its open, independent layer of application development tools. Cognos has believed for some while that the natural progression of the marketplace is towards separating the tools purchase decision from the database purchase decision. Consequently, its PowerHouse application development environment works with a variety of databases and if the customer requires it, Cognos will sell the Starbase database product – a derivative of Interbase, the database now owned by Ashton-Tate Corp. Grew fat
Of course, there are several large and successful applications development language companies, such as Information Builders Inc on the one hand and SAS Institute with its application generator on the other, but both these companies are privately held and grew fat in the IBM Corp world. Cognos is different in that it grew up in the minicomputer environment and has only in the past year looked to the IBM user for growth. Consequently, its natural competitors are Oracle and Ingres, and it is winning points and making profits because it is not pushing sales on the back of a database. However, this being the case it is surprising that Cognos has not been quicker to hitch a ride on the Unix bandwaggon. Revenues for 1991 were at the equivalent of $121m of which 48% came from the Hewlett-Packard Co MPE-V and MPE/XL user base, with 39% coming from the Digital Equipment Corp VAX/VMS market. The remaining 13% came from a combination of Data General Corp Eclipse MV sales, and sales into the Unix and AS/400 markets. The AS/400 revenue is growing very quickly Nordin says it contributed $2.5m in the five weeks before year end. Indeed, he believes Cognos could end up with AS/400revenue accounting for a larger percentage of its turnover than any other environment. One largely unspoken reason for this is that Cognos has a hunch that it is not really worth the effort for Oracle and Ingres to get their languages into this environment because there is no potential database sale. However, Nordin admits that Cognos should have a stronger presence in the Unix market – PowerHouse is already up and running in the HP-UX and AViiON Unix environments and Cognos says versions for Ultrix, SunOS, AIX on the RS/6000 and Santa Cruz Operation Inc Xenix will both be released by the year end.
The Canadian database and applications development language developer Cognos Inc reckons that it has a head start on its better-know rivals by having spotted early that it could maximise comnmercial success by unbundling its tools from its database and offering them for use with the databases offered by its rivals. After a slip into the red last year, Cognos has its finances back under control to the extent that the market is prepared to bankroll it with new cash via an underwritten issue of shares – so what’s next for Cognos? Katy Ring has been finding out.
In the Unix market, where a database is not sold as part of the system software, the Starbase product is likely to play a greater role in sales. Nordin said that so far the total number of Starbase sales is around 150 – aside from the Unix market, he thought it likely that those in the MPE/XL environment may increasingly opt for Starbase, although Allbase is coming along nicely. Having got back into profit, Cognos intends to stay profitable and to grow. One geographical area ripe for expansion is continental Europe and Cognos is currently beefing up its activities there under the aegis of the recently appointed European vicepresident John McIntyre. McIntyre helped to develop Cullinet Software Inc’s European business in the late 1980s, jumping out when Computer Associates International Inc gobbled Cullinet up in 1989. He i
ntends to reorganise the grouping of the Cognos European companies using the UK’s successes as a blueprint. Henceforth the UK will be part of European operations as will the Middle East. For example, the UK has a well-developed value-added reseller channel, which McIntyre hopes to emulate throughout the rest of Europe, dealing with European-wide resellers and systems houses.
He will also be hoping to export the UK’s marketing drive and verve to crack markets like Germany and Italy. Currently, approximately a third of the company’s revenues come from Europe and McIntyre says this will be nearer 50% in a fairly short timescale. Of course growth requires cash and Cognos are now offering 2.6m new ordinary shares underwritten by Donaldson, Lufkin & Jenrette through an offer that closes at the end of May. The money raised will go towards building the infrastructure needed for growth and some may be used to acquire technology or a stake in a synergistic software company. No such agreements are on the table at present. As for technology, what internal developments has Cognos got up its sleeve? Nordin points out that Cognos has a strong reputation in data dictionary technology and says that the current Cognos data dictionary will evolve into a complete and full-functioning repository for data and processes. The company may possibly buy in technology to add capability. However, this repository will be open and will hook up with CDD+ and the AS/400 Repository. Nordin admitted that Cognos has experimented with object-oriented languages and databases, but decided that they were not feasible in the short-run. Instead the company has decided to add object-oriented capabilities and extensions to current products. The first real evidence of this will be seen soon in the next release of PowerHouse, which will have Windows front ends able to handle certain kinds of objects. In other words Ingres Windows 4GL is about to see the launch of a serious rival.