Canadian software vendor Cognos Software Inc enjoyed a record fourth quarter and a strong fiscal 1998, preparing itself for entry of Microsoft into the data warehousing arena. Data warehousing is Cognos’ main market and it plans to enhance its product offering through acquisitions and partnerships, according to senior vice-president for marketing and business strategy Alan Rottenberg. Best known for its PowerPlay OLAP tool, Cognos reported fourth quarter net profits up 27.8% at $17m on revenue up 21%, at $70.7m. Its net profit for the year to 28 February would have represented an increase of 37.5 %, at $50.6m on revenue that rose 24% to $244.8m. However, write-offs of in- process R&D development relating to two acquisitions made in 1997 reduced the revenue for the quarter to $32.6m. Net earnings per share were also affected by these write-offs, coming in at $0.38 for the quarter and $0.71 for the year. These figures compare to $0.29 in the fourth quarter of Fiscal 1997 and $0.80 in that same year. Business intelligence (BI) is very much the mainstay of Cognos’s business, sales of PowerPlay, the database query and reporting tool Impromptu, its data mining tool Scenario and the data modelling and forecasting tool, 4Thought, totaled $176.2m last year. Thus the company has felt the need to position itself for the entry of Microsoft into the data warehousing sector, which will involve a proprietary OLAP server offering, currently codenamed Plato and earmarked for launch in the second half. Here, Cognos has responded with a front-end client for Plato, codenamed (what else?) Aristotle. The product is Plato-specific and set to hit the market at the same time as Plato itself, and Cognos chose as a source for technology none other than the Israeli company which sold Plato to Microsoft in the first place, namely Panorama Software. Rottenberg recalls that Microsoft itself used PowerPlay to run together as a front-end with Plato at one of its developers’ conference early last year. Indeed, Cognos believes it is in a position to ‘extend its leadership to the Plato market’ by offering customers ‘more valuable client alternatives’, as it reckons Microsoft’s preferred native front end, Excel, will be shunned by mainstream business customers for lack of scalability. In this context, he argues, Cognos’ recent move to endow its BI products with web functionality has partly addressed the scalability issue for them, since it is partly the volume and data and number of users, but also speed of deployment, and our web capabilities are helping on that score. Last year’s acquisitions of UK-based RIS and Interweave Software from the US were both part of its strategy of enhancing its BI products: RIS was the source of 4Thought, while Interweave provided the web capabilities for PowerPlay and Impromptu. While Rottenberg declined to be drawn on whether the company is looking for further acquisitions, he did admit it has a strong financial position, holding some $120m in the bank with which it could fund any more buying in of expertise.
