Merger Mania: What's Next For Analytics Vendors?

Cognos's planned takeover of performance-management (PM) and OLAP vendor Applix was eminently predictable. BI companies have been hungry for PM capabilities; think of the Actuate-Performancesoft, Business Objects-Cartesis, Oracle-Hyperion, and SAP-OutlookSoft deals. Cognos's step -- preceded by their 2003 Adaytum acquisition -- leaves Information Builders and Microstrategy as the only major BI players without deep, in-house PM solutions and Longview as one of the last remaining independent PM vendors, albeit noting their alliance with Information Builders and others.So what are the next targets for the analytics companies? Predictive analytics and, for those that don't have it already, text analytics.

That Cognos's next step would be a performance-management acquisition rather than a foray into search or text analytics was a toss-up. Arch-rival Business Objects paved the way by going after PM before gobbling up text-analytics vendor Inxight. The biggest consideration, however, was likely that performance management is here-and-now while text analytics is only starting to hit its stride. Also, the major BI players all have search-BI solutions in place, even if only underperforming stop-gaps.

I see text analytics as next on Cognos's shopping list, and I can think of a couple of companies Cognos could gobble up in an instant when the right moment comes. Those possible targets -- contact me if you want to know who they are -- do not, in my estimation, include BI focused text-analytics vendors Attensity, Clarabridge, and TEMIS. Those latter companies appear to be doing quite well and their principals seem to be having a great time. Only pressure from their venture-funding backers could push them to the deal table. By contrast, ClearForest, acquired earlier this year by Reuters, was struggling, and Itemfield, acquired by Informatica, was too narrowly focused on a limited data-transformation market.

Incorporation of text analytics by BI vendors has likely also lagged their performance-management initiatives because of the complications involved in bringing on-line new information sources and analytical methods. Folding in predictive analytics would be even more challenging.

Everyone talks about predictive analytics including me, but that field is still, with some reason, viewed as the domain of the PhD. SAS, SPSS, KXEN, Insightful, Fair Isaac, Angoss: they hit the target, but they have long experience and/or specialized capabilities. Even then, the companies from that list that also have mainstream analytical products appear not to have significantly integrated predictive analytics with those products. Yet I expect them, and the BI companies, to take a shot.

That would be another shot in certain cases. Do you remember Cognos Scenario and 4Thought?

Still, predictive analytics is happening, and there are certainly alluring possibilities. For instance, a French BI company might find Paris-based KXEN particularly attractive. And Toronto-based Angoss, which not incidentally has strong technology and a likely low price tag, could tempt a fellow Canadian BI vendor.

There is little question that the pace of analytics acquisitions will not slow. Perhaps the BI players will pause for a breather, but then it's on to predictive analytics and, for those that don't already have a solution, text analytics.

Seth Grimes is an analytics strategist with Washington DC based Alta Plana Corporation and chairs the Text Analytics Summit.Cognos's planned takeover of performance-management (PM) and OLAP vendor Applix was eminently predictable. BI companies have been hungry for PM capabilities; think of the Actuate-Performancesoft, Business Objects-Cartesis, Oracle-Hyperion, and SAP-OutlookSoft deals. So what are the next targets for the analytics companies? Predictive analytics and, for those that don't have it already, text analytics.