This has certainly turned into an exciting M&A season. First SAP announces that it will buy Business Objects and now IBM announces that it will buy Cognos. I am actually not surprised. While Cognos does sell traditional business intelligence tools (i.e., reporting tools), it has expanded over the years to offer a wide array of solutions focused on performance management and financial analytics. For example, the company offers six different solutions for various aspects of financial reporting and analytics including Planning (a solution for real-time visibility into resource requirements and future business results), Controller (a solution for managing the close, consolidation and reporting process finance), workforce performance (an analytical application that offers over 100 measures and 1,000 workforce-related attributes to support cross-organization reporting and analysis), performance management (analytics for customers, finance and supply chain), and Cognos Now! (a family of operational business intelligence and performance management solutions available as appliances or hosted software-as-a-service (SaaS) models).

Clearly, this is part of IBM's overall strategy to strengthen its position in the increasingly important information management sector. It is in keeping with IBM's horizontal software strategy as well. All of Cognos's solutions mentioned above are focused on solutions for analytics of the financial aspects of corporations.

IBM has had a strong partnership with Cognos over many years. In fact, the two companies have worked closely together on some key deals that have been focused on Cognos's performance management analytics capabilities.

I think this deal makes a lot of sense for IBM (even at the $8 billion price tag). It fills in some gaps both in terms of solutions and basic analytics. It enables IBM to compete against both Oracle with its Hyperion acquisition and SAP's acquisition of Business Objects.

Who is next? I expect to see HP begin to target some acquisitions in the BI space to both complement is Neoview data warehousing platform and to strengthen its software play.