In their largest acquisition in company history, IBM (IBM) acquired Cognos Inc. (CSN.TO), in a bid to compete even better in the "business intelligence" software space.
What business-intelligence software entails, is it empowers organizations to bring information together in a way that allows them to understand and see the impact of the moves they make. Things like hiring, promotion and sales data are brought together to see how its affecting the business.
IBM has been reinventing itself over the last several years, focusing on expanding its software portfolio, where much higher profits are generated than their extensive technology-services business.
Industry observers say that IBM will have a challenge in integrating business-intelligence software in a way that will be simpler and less expensive for customers.
Steve Mills, the head of IBM's software group, responded saying, "We never do acquisitions on defensive moves or based on what others are doing."
Even so, why would they make this step if that wasn't the case? Their competitors have made similar acquisitions over the last year in the same field, with Oracle (ORCL) buying Hyperion Solutions Corp. for $3.3 billion, and Business Objects SA (BOBJ) being acquired by SAP AG for $7 billion.
Once the deal is finalized, Cognos will be merged into IBM's information management software unit, with current CEO Rob Ashe expected to continue on in his duties. He'll report directly to the division's head Ambuj Goyal.
The deal is expected to close in the first quarter of 2008.
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