By: Gerry Brown, Analyst - Digital Marketing & CRM, Bloor Research (Moved)
Published: 17th November 2006
Copyright Bloor Research © 2006
When people talk BI, they inevitably compare the two biggest best-of-breed players: Business Objects and Cognos. But who really is the best? What differentiates one from another? How do they measure up?
In Bloor's latest report on the CPM market, Cognos is one of four leading enterprise applications vendors in the top ‘Enterprise CPM’ category. Business Objects is in the somewhat less exciting Finance CPM category. This is indicative of each organisation's view of innovation. Cognos likes to build exciting new products to satisfy customer needs. Business Objects likes to squeeze every last bit of profit out of its existing product set, and then acquire to gain fast entry to an emerging market in growth. One mark for innovation and bravery to Cognos.
Business Objects has the best Query and Reporting available today. Period. Hence it won a Gold Award for this in Bloor's BI report. In licence revenues it outsells Cognos by 1.5: 1.0. One mark for core product superiority to Business Objects.
For 30,000 Business Objects 5x and 6x customers, it is a tortuous and expensive path to upgrade to the Business Objects XI BI platform as it was built on the Crystal Enterprise v10 architecture. 5x and 6x customers are “encouraged” to upgrade to the XI platform as bug fixes will stop in 2007 and support will be discontinued by the end of 2008. Meanwhile, Cognos 7 will be supported to December 2010. Cognos is more in line with the lifetime support that is now offered to Oracle and Microsoft customers. In addition, for six months to one year, Cognos 7 customers can use modules of Cognos 8 in tandem with Cognos 7 modules for a phased migration. One mark for customer-centricity to Cognos.
Both suppliers have difficulties in upgrading their user bases to their new BI platforms. Customers say Cognos 8 is too complex and that Business Objects XI is not yet a ‘whole product’ solution, despite what Business Objects say about Release 2. Customers say their existing products work pretty well, so why change? The customers of both suppliers are really saying “deliver me more customer value rather than upgrade service and support packs, please”.
What about customer loyalty? Well, Business Objects seem to win out here. It is difficult to ‘turn over’ a Business Objects customer. Their account management is slicker and better executed, and they rarely lose customers to competition, despite the limitations of their product set. They seem to do just enough. However, sales teams can be fickle. Both vendors have been down on their target sales headcount, and both have been suffering from salesperson churn. One mark for account management to Business Objects.
And long-term supplier stability? The rumours still persist that Oracle will buy Business Objects and IBM will buy Cognos. I feel sure both would entertain suitors. BI licence software revenues are flat, and although both vendors are growing nicely their highly profitable services businesses (after all, they both have ‘Global Services’ businesses now), the investment community still sees licence growth as the key driver of shareholder value for the longer term.
The market is still unclear about whether any best-of-breed BI vendor will make it outside the BI niche in the broader enterprise applications market where they will come head-to-head with the likes of SAP, Oracle, and Microsoft, who are over 10 times their size. Time will tell. For the moment though, Cognos has the edge, but only just.
Posted: 17th November 2006 | By Bob :
I strongly disagree with your conclusion. Business Objects should either be in parallel with Cognos, or above. I would be interested in a follow up article with further reasoning for your decision.
Posted: 17th November 2006 | By Nigel Gant :
Judging from the Bloor website (see links above), if you buy both BI and CPM reports by Gerry this will set you back almost £2000. His research and analysis must be very thorough!
Posted: 17th November 2006 | By Jim :
Great article. Out of interest can you share with me the difference between BI and CPM - thx. Jim
Posted: 17th November 2006 | By Gerry Brown (Author):
Hi Bob I am very happy to debate the BOBJ Vs COGN positions. Constructive criticism usually leads to more robust conclusions in my opinion. Email me at firstname.lastname@example.org and we can either swap some emails or do a tele-conference sometime. I am glad the article encouraged you to respond. Best, Gerry
Posted: 17th November 2006 | By Gerry Brown (Author):
Hi Jim I am glad you liked the article. Here's an extract from the Bloor CPM report which should help clarify the distinctions between CPM and BI: CPM is a top-down model that begins with business strategy. BI is bottom-up analysis that begins with situation analysis.
CPM metrics are based on goals and objectives. BI metrics are adhoc and mainly retrospective.
CPM aligns to business processes. BI aligns to information requirements.
CPM is a closed-loop model that controls and monitors business processes. BI provides open-ended analysis of operational
CPM is analytical applications-based. BI is tools-based.
Posted: 17th November 2006 | By Gerry Brown :
Hi Nigel Well I guess I would have to say the Bloor BI and CPM reports are good value for money, wouldn't I! But seriously, there have been many instances of BI and CPM projects which have been successful and have cost customers many millions of dollars. The root cause is hurriedly made decisions, often to exploit a price discount, without taking due diligence. A report bought from Bloor or any other analyst helps to reduce that risk for a tiny fraction of the overall cost of a project - and the cost of canning a project. I think that is worthy of consideration. Best, Gerry ps Bloor has a "2 for the price of 1" sales promo going on, so there has never been a better time . . . ;-)
Posted: 20th November 2006 | By Michael :
Great Article, but no mention of Support acceptance or Maintenance revenue? I would think this would be a large contributor to determining the King of BI, no?
Posted: 21st November 2006 | By Gerry Brown :
Hi Michael Yes I agree. Good point. A good topic for a follow-up article next year. Gerry
Posted: 23rd November 2006 | By Rory Fitzpatrick :
Hi Gerry, Global market share says SAS is bigger than Cognos, so why not a three-way review? Rory
Posted: 24th November 2006 | By Gerry Brown :
Hi Rory There was not really space in a short ITA article to look at all three vendors. Worthy of thought for a later date. Thanks.
Posted: 7th December 2006 | By Arman Eshraghi :
With regard to "The King of BI" article: Obviously COGNOS and BO have a strong PR and AR force behind them and also have a huge customer base and their brand names are very well established (just to name a few among many pluses). Also as we know the overall BI market is growing at a good ratio. HOWEVER - as you indicated - their license revenue are still flat. What do you think the problem is?
Posted: 7th December 2006 | By Gerry Brown (Author):
A combination of a lot of things I would say. Firstly, looking at the marketing theory, I would use Porter's 5 Forces to review BI market attractiveness.
Barriers to market entry: none - and high margins have attracted lots and lots of suppliers Availablity of substitutes: lots e.g. most ERP vendors like Extensity and accounting vendors have in-built BI and there is Excel . . . Bargaining power of customers: supplier switchability is difficult, but there is lots of competition to force margins down Bargaining power of suppliers: all the products look the same from the customer, so brand and incumbency are the sole determinants of bargaining power. What this all means is that it is a fiercely competitive market with a high level of competitive rivalry. Solid licence and margin growth will only resume when the smaller players have either exited the market or the bigger players have acquired them. This will be around mid-2008 in my opinion.
There are lots of other factors though - anyone else want to pitch in their ideas?
Posted: 8th December 2006 | By Wallace :
Good discussions. My two cents are:
BI per se is a broad concept or umbrella that could including Analytics, BPM, CRM, etc. As I know, few companies has standardized only one BI tool (such as BOBJ or COGN) since they know, today, single BI tool (vendor) could not solve all they business problems (or meet all their business requirements). They need several of tools or the combination of them to meet their needs from technical, business, and political point of view. Also, no single BI tool could serve as a silver bullet to solve all the issues enterprise has at current complex environment.
Posted: 1st November 2007 | By Brian Kaplun :
Hi, I have worked with several versions of the Cyrstal products and for some time now been getting into Microsoft's Reporting Services, Integration Services, etc. At my current client site we are having discussions about different reporting methods and Cognos has been tossed into the mix.
I reviewed some of Cognos on their site, looked at there integration screen and it looked exactly like MS Integration Services.
Is Microsoft's line of products in the same category as Cognos same line of products?
Brian Kaplun, IT Consultant
Posted: 2nd November 2007 | By Gerry Brown (Author):
The main difference between the BI software of Cognos and that of Microsoft is cost and the level of integration and functionality for the enterprise. Microsoft Analysis Services and Reporting Services comes in the box of SQL Server and costs around $20K. Cognos software cost 5 - 10 times more than that, but is a more complete solution. Depends on the size of organisation and what they want to use it for - also check out the new Microsoft product Performancepoint which offers a lot of functionality and offers an upgrade path from Excel.
Posted: 2nd November 2007 | By Brian Kaplun :
Thanks for the feedback Gerry.
Your information is the exact verification as it fits right in with what I had gathered as well, with the exception of the abilities of Cognos against Microsoft solutions.
Also thanks for the tip on PerformancePoint, I will look into it.
I have been familiar with the costs for the Microsoft products and was being informed that everything to match it from Cognos would be about $50,000 and you just fairly much install it and it will go find the data....etc..etc.. for you with very little programming.
I was suspecting the cost was a bit low and not buying into that you just drop it on the system and it will pull everything together without and development work.
It is a smaller organization and already a Microsoft shop. Being a Microsoft guy, I was already leaning towards what I know, but still needed to investigate possible better solutions vs. costs of course.
Posted: 13th February 2008 | By Adriano N Silva :
B.O aparenty has many programs to build a solution
Cognos has less programs, and is totaly web.
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