Kellblog

As predicted in my post about the SAP acquisition of Business Objects, IBM today announced that it has offered $4.9B in a friendly bid to acquire #2 independent business intelligence tools maker, Cognos. Per this New York Times story, the bid amounts to a 9.5% premium over Friday’s closing price, but the story also asserts that seemingly low premium is the result of a run-up in the stock resulting from speculation that such an acquisition was imminent.

With Hyperion acquired by Oracle, Business Objects acquired by SAP, and now Cognos acquired by IBM, all the major players except Microsoft have their BI dance cards filled. Does MicroStrategy end up a tony bachelorette or a wall flower going forward?

Sure, MicroStrategy could theoretically get acquired by Microsoft or SAS, but I don’t see either as particularly likely. By the way, MicroStrategy has done a great job of quietly rebuilding the company after it was wracked by scandal in the post-bubble. For example, in their most recent quarter, they had a healthy net income of $19M on sales of $96M and, on a quick glance, all of their ratios look pretty good to me.

So A+ in execution for MicroStrategy, but the question is does any of it matter? Does the market need a $400M independent BI company? The prevailing wisdom is no. And that wisdom not only was the cause of the recent “wave 2” BI consolidations, it’s also the force behind the wave 1 consolidations as well (e.g., BOBJ/Crystal, COGN/Adaytum, Hyperion/Brio).

Opinion-wise I’d don’t have much to add other than:

• The deal was fairly obvious, speculation was rampant in the blogosphere, and the stock had risen from $37 to $50 in the past 3 months

• It’s part of a broader trend of BI consolidation and beyond that enterprise software consolidation.

• The truly interesting question — and one I started to tee up already here — is whether software industry consolidation will work? Is it really about sales, R&D, and G&A synergies, or is it simply about ego and size? Put differently, is Oracle on track to become General Motors as most people seem to think, or is Oracle on track to become ITT?

See this post for the start of that thread. And see this article on the history of conglomerates for more background. And thanks again to Alex Moissis for getting this whole meme into my head.

One of our consultants is doing some testing of MarkLogic vs. XML-extended relational databases, and he sent me an example of the kinds of queries you need to write when you’re mixing SQL and XQuery/XPath. Here is an example:

SELECT XMLQUERY( ‘$p/Citation/Index/ConceptCodeList/ConceptCode’ PASSING P.XMLDATA AS “p”)FROM AllCitations AS p WHERE contains (XMLDATA,‘(SECTION( “/Citation/Index/ChemicalData/ChemicalList/ChemicalName”) “leucovorin”)&(SECTION( “/Citation/Index/ConceptCodeList/ConceptCode”) “Pharmacology”)’) = 1;

A few things spring to mind when I see queries like this:

• This is why people made XQuery — so you wouldn’t have to write stuff like this.

• Why in the world do you need to mix XPath and SQL in this way? In a theoretically bi-lingual SQL/XQuery database, can I just write document-oriented queries purely in XQuery and not mess around with selecting columns that are themselves XMLQUERYs? Answer: in DB2’s ironically named pureXML, you need to use SQL as the outer framework if you want to use full-text indexing; so yes, you must do this.

• Are there more than 10 people in the world who will understand what the answer to this query is supposed to be? SQL and XQuery each have their own semantics, and few people deeply understand them. How many people understand not only both SQL and XQuery semantics, but also how they interact? (It reminds me of trying to find a tax guy in France who could do both the US and French systems at the same time.) I watched two world-class experts debate what the correct answer was to such a query for 20 minutes. Does Joe Programmer even have a chance?

If I told you fifteen years ago that a family-owned California hamburger chain founded in 1948 was going to beat McDonald’s in hamburgers, what would you have said?

“Beat McDonald’s in hamburgers? Are you crazy?” And you might have added: “Burger King’s the poster child for why that will never work.”

The problem is that Burger King is a classic, #1-focused competitor who, by virtue of its focus, condemns itself to be a poor imitation of #1, offering effectively the same product and same value proposition.

In-N-Out Burger, other the other hand, is a different animal. They do one thing — burgers — and they do it well (i.e., quality product). No salads. No chicken sandwiches. No Croissanwiches or McGriddles. No fish sandwiches.

I remember first observing this about 10 years ago when I was eating a Double Double in parking lot of the In-N-Out on Rengstorff in Mountain View. While the In-N-Out drive-thru was 20 cars deep, the McDonald’s across the street was empty. I thought to myself: “wow, the power of focus and quality.” So I know that I’ve always liked In-N-Out.

What surprised me was to find out the the top chef in Northern California, Thomas Keller, proprietor of Northern California’s only Michelin three-star, The French Laundry, is a fan as well. Here’s a blurb from the latest issue of Via Magazine (you need to scroll down quite a bit to see it). Bolding mine:

WHY THOMAS KELLER LOVES IN-N-OUT BURGER
I really respect a company that holds its ground when there is so much pressure to follow the “what’s next, what’s new” trend. In-N-Out’s quality lies in the simplicity of what it promises and delivers. To be able to do something over and over with integrity and excellence, even if it is fast food, is something to be truly admired.

One reason I give Fast Search & Transfer a hard time is that I don’t like their communications strategy. For example, during their recent and ongoing financial travails there has been way too much “happy talk” in their communications for my taste.

They irked me again today with this press release. When I read the headline — silly me — I thought they’d launched a new knowledge management solution, or maybe a whole line of them.

Here’s the headline:

Knowledge Management As We Know It Is Over: FAST Delivers Next Generation Search-Powered Information Discovery Solutions For Enterprise 2.0

Yes, it’s wordy (20 words) and even more buzz-wordy (e.g., next-generation, search-powered, enterprise 2.0). But at least, when stripped of the hyperbole, it seemed clear. Fast was announcing a new series of knowledge management solutions.

Or were they? Let’s read the lead paragraph of the body copy to find out:

Fast Search & Transfer, the leading provider of search technologies, today announced that one of the largest European IT services providers, TietoEnator, has gone live with their intranet solution powered by the award-winning FAST Enterprise Search Platform.

Huh? So a company I’ve never heard of, that’s got more vowels than a Greek wedding program, has deployed Fast’s core product. But what’s that have to do with redefining knowledge management and delivering enterprise 2.0 solutions that change knowledge management, forever?

Not much, it turns out.

We later learn that TietoEnator is not purely an end-user customer. They’re an implementation partner who decided to use the technology internally. This isn’t bad mind you, but it’s not as credible as an end-user customer. An implementation partner, after all, is incented to help you get more implementations.

And if credibility comes from clarity, this not-so-pithy CTO quote doesn’t do much to help:

“During the next five years, we will see more and more organizations shift their investments away from legacy knowledge management and towards Enterprise 2.0, enterprise search, information discovery, and other tools, technologies, practices, and processes that allow for emergent work patterns to form in a vibrant ‘learning organization.’”

Finally, since we now know it’s a customer press release — and not a solutions announcement — it’s always good practice to factor in the health of the customer that you’re promoting. After all, you wouldn’t want to promote Nike’s use of your supply chain software right after they missed a quarter due to a major inventory problem.

So what’s TietoEnator up to of late — let’s look at this three-week-old release: TietoEnator revises full-year profitability guidance, renews strategy and changes CEO.