The news hit this week that IBM was making its largest acquisition ever – the $5 billion purchase of Cognos, another Ottawa-based company, and a pioneer in the area of business intelligence.

What I find fascinating is to contemplate the parallels between the business intelligence and unified communications markets. Flashback to early 2003, with Microsoft’s announcement that Yukon (SQL Server 2003) would deliver native BI functionality, the market predicted the demise of the standalone BI vendors, companies like Cognos, Business Objects, Hyperion, Crystal and others.

Microsoft’s entrée into the space created confusion across the Incumbents and in the marketplace. But as partners analyzed and customers digested, Darwin took over. There was consolidation in the space, as smaller, niche companies were picked up by larger players to help round out their own solutions, but more importantly, the successful companies evolved.

The leading companies, like Cognos, recognized that there was no longer money to be made in selling BI plumbing, and they migrated up to fixtures (i.e. applications). As people came to understand, it wasn’t BI that was compelling, it was the application of BI in a business context that was exciting. And so, business intelligence morphed into business performance management (BPM).

What can we learn?

I believe that unified communications is now on a similar path. Microsoft and Cisco will combine to make the market and bring it into the mainstream – quickly. However, people will fast realize that the plumbing is of declining value/interest. Why would a customer pay for basic telephony when Microsoft is essentially giving it away for free? And so, just as BI became BPM, UC will become CEBP (communications-enabled business process). With Microsoft’s help, people will quickly learn that it is the application of UC in a business context that is interesting, not UC itself, and the vendors that win will be those that deliver on this.

That’s my .02!

Martin Suter
President

PS – Be careful out there.