Andrew Wahl: Will Cognos be the focus of a bidding war?
Wednesday, October 17, 2007 | 09:00 AM ET
Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).
Andrew Wahl is the Business Network's technology columnist. He is a senior writer at Canadian Business magazine.
By Andrew Wahl
(Listen to the original audio)
We all have those days when we wish the rest of the world would just leave us alone to go about our business. I’m sure that’s how the executives at Cognos felt last week.
The company is by far Canada’s largest maker of software, and plays in a hot segment of corporate software called performance management. On Thanksgiving weekend, its larger rival, Business Objects, agreed to be acquired by SAP, the German software giant, for nearly $7 billion US.
It was somewhat of an about-face for both companies.
Business Objects had maintained for a long time that it saw its independence as a strategic advantage, and SAP has refused to make big acquisitions. But the deal was not a complete surprise, not after the number three player in performance management was snapped up in March by SAP’s aggressive competitor, Oracle. (Oracle, by the way, made yet another move last week, launching a hostile $7 billion US bid for BEA Systems.)
All the shifting allegiances now leave Cognos, the number two player in performance management, as the last one standing on its own.
Being picked last might not be such a bad thing. For starters, the company can position its independence as a selling point to customers — its software works with all systems well, not just one.
Perhaps more importantly, though, it means Cognos could end up as the focus of a bidding war between Microsoft, IBM and HP — the three most frequently cited names of possible suitors. That’s why Cognos’ shares went for a ride last week, rocketing 15.5 per cent over five days.
Cognos doesn’t really want this kind of attention, though. It’s been the focus of takeover speculation for more than a year now, and it threatens to be a distraction for shareholders, employees and customers from what is otherwise a strong, thriving business.
At some point, whether it’s a few months from now, next year, or in 2009, one company will finally draw out Cognos. The challenge facing Cognos? Not waiting so long that it’s no longer in a position to control the terms.
- Andrew Wahl
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