Has the fizz gone out of Cognos?

Cognos’ latest quarterly results were rather a flat affair. Licence revenue is just 3% up year over year, while quarterly revenue was respectable at USD 237M, but what growth there was came mainly from product support fees (up 13%) and services (up 10%) which is less than an ideal mix for a software vendor. On the positive side, an operating margin of 12.6% is quite good, and up significantly from the 9.6% of last year.

Less good was that there were 7 deals over USD 1 million, down from 13 the same time last year. Europe and Asia did better than the US. It seems that the financial applications business is doing better than the traditional core BI tools business, which is rumoured to be shrinking.

Overall these are certainly not bad results, but in a fairly healthy BI market they are hardly sparkling, which seems to be reflected by a dip in the share price.

2 thoughts on “Has the fizz gone out of Cognos?”

  1. Risk reduction, that is why BO, Cognos etc will continue to sell, even for seven figures. Risk reduction more fundamental than the fact that they are established industry players. Business model risk reduction comes from buying from a vendor which has an upfront known cost, like Cognos, rather than a vendor whose business model involves making money from support, training and consulting eg Pentaho. Wonder how much support, training and consulting you might need? My guess would be alot if New Enterprise Associates and Index Ventures are to be kept happy.

  2. Talk about the long tail. How long can BI continue to sell these solutions for seven figures before prospects and clients realize that there are open source alternatives at a fraction of the cost?

Comments are closed.