Friday, June 29, 2007

Cognos--Sagging or Just Lagging Support?

OK OK, nice double entendre I know, but since I'm the only Performance Guy posting these days (apparently there's this holiday called "Canada" Day that Nic is celebrating this weekend. Like that's real), and Pat's off somewhere reengineering cocktail processes.

So since the adults are away, let's continue our journey this week and shine the spotlight on another competitor in the peformance management space, our friends in Ottawa (speaking of this "Canada" Day celebration), Cognos.

Cognos announced their earnings this week, which was met with a collective gasp, cheer, or general yawn from the pundits on the market, depending on who you're reading. But the consensus seems to be settling around the main point of the AP article linked here, which points out that profit fell short, big deals fell short, and the go forward outlook was more conservative as well.

Now is this due to Oracle and SAP being more competitive? Not likely yet, as they, plus Business Objects, are still digesting acquisitions, so while there was certainly some short term pricing pressures on the part of the acquired vendors (the old "we don't want to raise prices but you never know what the new guys might do, they're CRAZY!" line of attack). But none more so than in past competitive quarters.

Is it a product portfolio issue? Again, it would not appear so. Cognos, as they are thisquick to point out ALWAYS, has been LIGHTYEARS ahead of everyone in the market on performance management. And in many respects they're right, although not really against Hyperion, and if you count the redundant consolidations and planning tools in house, I'm not sure it's quite as valid an argument, but as Mr. Glass house himself right now, I'll even give them a pass on this one.

Maybe it's market momentum? I have the personal opinion that the brand feels old, they've been hit with a lot of sales and product management departures, maybe it's just an execution issue? Whatever it is, they're not letting on, but the cracks in the armor are starting to show, and for the first time in months, the stock price fell below Business Objects price.
Now don't everyone shoot me on what stock price actually indicates, I'm not an idiot (Pat and Nic don't respond), but if you had $40 extra dollars today, and you could invest in 1 share of both Business Objects and Cognos, you'd have an equal choice--and that's a newer development.

So I believe that all is not right in the Great White North these days, and the unease you feel eminating from the recent earnings call is not imagined. It will be interesting to see how they turn this around given the rapidly changing dynamics of the market.

Thursday, June 28, 2007

Applix Standing Out from the Crowd

Although the remaining independent performance management quadrant vendors are fewer in number, there ARE some interesting plays out there for companies, purely from a technology stand point. Applix is one such company. Their TM1 product has made the short list of acquisition targets from Palo Alto to Paris, from Stamford to Sunnyvale. But for some reason companies have never been able to pull the trigger.

We get one clue why some may be reluctant from this article on investing site Motleyfool, which takes a look at the great success Applix is having in the marketplace right now--increased earnings, growing top line and maintenance revenue, and continued customer acquisition.

The down side of all this, purely in terms of acquisitions, is that their value. While rated by the Fools as a 5-star pick, the multiples of the stock when compared to the revenue stream are hard to swallow. That it's trading at its 52 week high is great for stockholders, but not as great for the vultures out there.

Still, if there's one remaining independent performance management pure-play that has a chance, now due in part to their liquidity, it's hardly a "fools" (woo fools get it?) errand to think that Applix may be the one.

Wednesday, June 27, 2007

It's more of a journey, not a destination...

Still cleaning out the in-box from travel and vacation, but wanted to post this short Q&A with former Hyperion Chief Strategy Office of Hyperion, on his take on business performance management and what it takes to get up and going--quick read, not as much insight as I would have hoped for from the self proclaimed "Father of BI."

Howard is a tremendous asset for Hyperion and Oracle, and it will be interesting to see how his role with the new organization unfolds as the strategy for Hyperion and EPM becomes clearer. You already know there's a big change when the Hyperion results hardly merited a mention in the Oracle earnings call...

Tuesday, June 26, 2007

Now playing, the “Less Attractive” Players

So if the previous post contains arguments FOR the last of the independents making their case successfully to customers vs. the SAP’s Oracle’s, and Business Objects of the world (okay, maybe Cognos too, fine, whatever), there’s lots of cases against them—let’s list some here.

· Don’t you think someone would have bought them if they had such great technology?
· There’s a reason we bought their competitor
· Performance Management is more than just , it’s really about and you, Mr. customer, need to be thinking here

18 footers just inside the arc
· Will the small vendor survive—can they survive?
· Big vendor customer base vs. small vendor customer base—where does the customer feel safer, with whom do they associate most?
· Technology—is the small vendor on old or outdated/legacy technology (um, yes if you’re Longview—kidding Longview readers!)

Heaves at the buzzer
· Dis their financials (can I still say “dis” as a white man?), growth, profitability
· Point out they are trying to sell themselves 24/7
· Position their technology outside of the mainstream of performance management

So what are some others?

Question for the Class:

Does the recent consolidation of performance management vendors make the remaining independent vendors MORE valuable or LESS attractive to customers?

Let’s take the “MORE” argument first.

Low hanging fruit:
· less competitive clutter and comparison companies to be evaluated against for an acquisition
· easier to play the “we’re the last of the independents” card than before
· take advantage of vendor integration issues and make hay in the market before bigger vendors get their stories straight

Medium hanging fruit:
· Clearer differentiation between their story and the larger faceless nameless conglomerate
· Faceless nameless conglomerate has lots of okay products to sell, they have one really good one
· conglomerates move slower, slower to respond

Not quite ripe fruit:
· “We’re seeing a lot of people trying to join us since the acquisition was announced.”
· Threat of product discontinuance or lack of ongoing support for products makes the independent vendor more reliable and dependable.
· Now the current product line-up of the conglomerate de-emphasizes so this isn’t a core business for them like the independent vendor.

What am I missing here?

The CFO Presentation

So in my last post I talked about the theme of the keynote presentations at the CFO conference--and how mine was different and why I thought it was important that it was.

And it's not a huge long ego trip for me to say that it was great "because" it was different, or great just for the sake of being different. Or that it was even great. Which it was, but that's beside the point.

The point was that CFO's are inundated today with the same information when they're at work--they hear the vendor pitches, the inventive direct marketing campaigns designed to somehow skirt the executive assistant and magically make it onto their desk--they've seen it all.

And if they're going to pay money to leave work for two days and spend time in a darkened conference room, then they're not looking for 2 year old market stats. They're looking to be inspired. They're looking for that spark that starts a process, an idea, heck, that something keeps them awake.

And so talking about the importance of strategy and strategic planning was an interesting approach for me, as we obviously could have trotted out the same old slides about process and closed loop solutions. But when we saw that no one was talking about strategy, a topic that's in the forefront of a CFO's mind, but which they don't get to spend as much time as they'd like, we knew we had a winner. And grabbing almost 40% of the conference into our presentation up against 4 other vendors was great validation.

Wednesday, June 20, 2007

The CFO Conference a Few Weeks Ago.

Nic and I had the good fortune to land at the same conference in NYC a few weeks earlier for the most recent installment of the CFO Magazine Performance Management donnybrook in beautiful Times Square in Manhattan. In between ducking for cover between rainstorms, we managed to get some great insight from the executives on sight.

To build on Nic’s recap (a bit short and lacking in any meaningful detail if you ask me), I thought the event was, well, fair. Actually I expected a bit higher caliber event than we got, which is due in no part to the hard working staff from Unfortunately the keynote speaker, Craig Schiff, was late to his own presentation, owing to traffic delays, so the day didn’t start off great by going right into the customer presentation. Normally you’d expect to set the tone with the analyst and then dig into details with the customer, but the opposite happened here, so it ended up being somewhat disjointed.

I’m also not sure that we gained any real new insights from the keynote presentations. There was certainly some good, if dated, materials, but it seemed to be a bit of a rehash of things we’ve heard before, and that’s where things fell a bit short for me.

It’s also hard when you have to plan for a common denominator of attendee—a decision between talking about really cool content that appeals to a fraction of the audience, or the safe middle ground that covers the majority of the attendees. So the keynote speakers clearly went for the middle ground.

I took a different tact however, and will leave that for my next post, as I think it really illustrates the issue that both analysts and vendors have in today’s performance management marketplace.

More to come…

Back in Black

My apologies for the lack of posting here in our little space on the Internet. The travel and vacation bug has struck the Performance Guys—or at least 2/3 of us, and Pat will rejoin the fray next week. But I’m back in action now and ready to tell ALL about the CFO conference a few weeks ago.

Thursday, June 14, 2007

Budget Mistakes Excel

How much Excel can business users really handle and how much lack of spreadsheet knowledge presents a burden to the finance department? Here is some interesting data put together by the Buttonwood Group and CFO Magazine on the situation. The survey found that front line managers typically rejected planning and budgeting software applications and relying on finance to step in and prepare the budget on their behalf, creating a lot of extra work for finance and results in a lot of budget mistakes. Do line of business managers have the Excel skills to build accurate budget numbers to begin with? This survey would suggest not, and claims to place an onus on vendors to being pushing a simple interface for the budgeting process that is “business user friendly.” One could argue that much of this is not a skills issue but rather a cultural issue and needs to be ingrained into the ways line of business managers think about planning and budgeting, some might say it’s simply job security for finance heads.

Friday, June 08, 2007

CFO's in the House

A couple of the performance guys had a chance to attend CFO magazine conference this week in New York where CPM was the hot topic of debate and finance executives had a chance to mix and mingle with each other to gather insights into how to drive performance management best practices in their business. The intimate event hosted about 175 attendees and offered vendors a chance showcase their position on CPM. The event certainly demonstrates the momentum in the area of performance management and its relationship with BI. Craig Schiff of BPM Partners also provided a keynote, I’ll let the other performance ‘Guy’ chime in on his thoughts on the event.