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IBM purchase of Cognos squeezes middle tier companies

Stand-alone business intelligence software companies are facing an increasingly difficult (and perilous) period as the bigger guns in the tech companies fight each other to buy the best of breed.

After Oracle's purchase of Hyperion Solutions back in April for USD 3.3 bn followed by Business Objects' acquisition by German SAP in October in a deal worth USD 7bn, it's now IBM's turn to get peckish with a USD 5 (opens in new tab) bn offer for Cognos.

The deal comes nearly a month after BEA systems (opens in new tab), a competitor to Cognos, rejected Oracle's offer of USD 6.7 bn, saying it undervalued the company.

IBM and Canadian Company Cognos have been working together for more than a decade and represent a nice fit.

Big blue is offering USD 58 per Cognos share, nearly 10 percent higher.

There are only five or so 1-bn plus independent middleware companies remaining: Microstrategy Inc, BEA Systems, SAS Institute, Sybase and Teradata.

Businessweek (opens in new tab) says that it is unlikely that more acquisitions will be made since the above named companies are either too expensive or reluctant to sell or simply have too many competing lines with potential suitors.

Instead Businessweek points to a little known Business Intelligence specialist; the Swedish based company Qliktech, which the magazine says has the potential to change the industry.

Désiré Athow

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.