Cognos speaks out on BSG split

Software vendor Cognos has cast doubts over Business Systems Group's (BSG) ability to provide a truly vendor-independent business intelligence model after revealing to Channel Middle East that it formally terminated its relationship with BSG last week.

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By  Andrew Seymour Published  August 9, 2007

Software vendor Cognos has cast doubts over Business Systems Group's (BSG) ability to provide a truly vendor-independent business intelligence model after revealing to Channel Middle East that it formally terminated its relationship with BSG last week.

BSG has acted as an authorised Cognos partner for the past 18 months, but yesterday announced a vendor-neutral strategy following the launch of a regional ‘Business Intelligence Centre of Excellence'. That move will allow it to offer products from other vendors such as Business Objects, Oracle and Informatica.

Dubai-based BSG informed Cognos of its plans in July, but it has since emerged that Cognos has chosen not to back the strategy, leading the vendor to issue a formal termination notice. "We actually terminated the relationship with BSG last week, giving them a 30-day notice period to effectively tie up the loose ends," confirmed Derek Morrison, regional general manager at Cognos Middle East.

BSG believes its vendor-independent stance will open it up to customers who don't want to be limited by a single brand, but Cognos views the situation differently. "Our clients have been saying to us we want a domain expert and you cannot be master of every product that is out there in the market place," argued Morrison. "You really have to nail your colours to the wall. And BSG have gone Crystal, Business Objects, Cognos, and I think they are now going Oracle, so they have been round the houses."

Morrison also suggests that the practicalities of operating a multi-vendor policy are better suited to larger systems integrators in the mould of a Wipro or Satyam with access to significant human resources, than they are for companies such as 20-strong BSG.

"The smaller organisations and partners out there have to really choose where they are going to have that expertise," said Morrison. "They can't spread it too thinly or they're not able to support multiple products. If you are going to support those multiple products you've got to have a support desk with individuals who are domain experts. So the sheer economics of supporting multiple products is not, in my opinion, a viable economic model. However, that is certainly the route that the partner has chosen and we respect them for that."

BSG, in response, insists that it can readily draw upon the resources it needs to effectively operate its new centre and deliver on the promise of advancing its customers' business intelligence and performance management initiatives in a more streamlined and risk-free manner.

"The thing is we will not have an army of people on board here at BSG in Dubai but we have alliances with companies back in India, and I can list them if required, who have the resource pool available as an extended arm to BSG," explained Raheel Khan, regional general manager at BSG. "We've got the project management skills and the expertise. If there is a project that entails five people, for example, it could be that two people from BSG will be on board and then three other resources are brought in from elsewhere. And they will be managed by BSG and follow the best-practice and methodology that we have in place. That's the kind of model we would be taking if there are issues over manpower or resources."

Cognos plans to meet with BSG management in the coming weeks to discuss how best to migrate any mutual customers to the Cognos direct support model. Morrison - who maintains that the split has been a "very amicable divorce" - also says the relationship it now has with BSG does not preclude it from working together in situations that it terms a "joint opportunity."

BSG has also expressed its desire to sit with Cognos and explore how both parties move forward. "We will see whether there is another model that we can work through for licensing and maintenance, or whether there is no model," said Khan. "And we also need to resolve the training issue because while the licensing and maintenance agreement has been terminated, the training agreement is still on."

The current turn of events comes as Morrison - who has been in the region almost a year and grown the Nasdaq-listed vendor's local headcount to 10 people during that time - says Cognos will continue to pursue a strategy of ensuring that the skills of its channel partners' are not tied exclusively to business intelligence.

"For this region specifically the focus is on tomorrow," said Morrison. "It's not just a question of having a business intelligence competency centre, it's having the competencies around performance management, and planning and performance around tomorrow. That's why when I came out to the region last September I had to assess all our partner skills and look at the partners who were embracing performance management. Perhaps that doesn't sit particularly easy with some of our partners."

Cognos continues to shift its regional business to a model where the bulk of implementation and support work is delivered directly. According to Morrison, the Middle East is now moving in the direction of its global operations, which typically generate 30% of business from a partner network and 70% through direct sales.

"Prospective clients nowadays look to the vendor to take responsibility," added Morrison. "And in this region I will not say that the partner model is dead - the partner model is not dead - but clients are looking to the vendor to absolutely take the lead. They want the vendor's warranty around software, they want the vendor's warranty around services and therefore they want that guarantee of success that the project comes in on time and on budget. Whilst we will still have partners because they have additional competencies, we are certainly taking this market more on a direct model."

3755 days ago
Azim Munshi

Aaaahhh… the truth is out. If what BSG is saying is true, then one can comprehend why Cognos is behaving more like a jilted partner, trying to clutch on to any face saving straw. By making the blunder of casting unwarranted aspersions about BSG and appearing a bit too smug, Cognos has opened up a can of worms that they could have done without. Looks like some fragile egos got bruised at Cognos by BSG’s decision to ditch them. Some vendors will remain in a state of denial, keeping their heads buried in the Arabian sands and letting their exposed rear ends do the thinking. It’s quite clear who the loser is in this deal. More power to BSG.

3755 days ago
Shabbir Khan

I have had the privilege to work for BSG and am currently living in New York, running a multi-vendor BI practice. I will also share Mr. Grandisson’s view that a lot of very successful BI organizations here, even with a very modest staff strength, have a multi-vendor portfolio of solution offerings. I have worked with two of them myself and the model has worked very well.  
 
 
 
What I can confidently say is that BSG is the most focused BI vendor in the Mid-East region and has had an impeccable track record of success that no one can refute. I am not privy to the details of their Cognos relationship, but I am sure BSG must have taken the decision to discontinue Cognos sales on an exclusive basis after a careful review of the whole situation. In a market like the Mid-East, if a vendor is going to pick up 70% of the business direct, which would presumably include most of the large blue chip accounts, it makes little sense for a partner to try to pick up the crumbs while retaining a dedicated team to support that vendor on an exclusive basis. This may have been BSG’s motivation to change their business model and Cognos seems to have found it a little unpalatable for BSG to move on with or without them. I have worked with all leading BI products including Business Objects, Cognos, Hyperion, and Microstrategy and they are all good products, each with its own individual strengths. But a product is only half the battle. Delivery and execution, with an emphasis on strategy, process and best practices is the rest of the battle. And that is where either the vendor themselves or their partners must demonstrate clearly their strengths to be successful. I wish BSG and Cognos the best for their future plans. 
 
 
Shabbir Khan 
CEO and President 
347-224-4947 
skhan@ritnoa.com

3757 days ago
Nasser Tufail

I found this piece quite amusing, though calculatedly misleading, and would like put everything into perspective and set the record straight. Mr. Morrison has made some irresponsible statements and left out some important facts that warrant a mention. First, BSG has only been a partner of two BI vendors until now - Business Objects for about 10 years (selling Business Objects exclusively) and Cognos for about 18 months (again, selling Cognos exclusively). BSG was never a partner of Crystal, as suggested. Crystal was acquired by Business Objects and incorporated into the Business Objects product set. BSG has always been very clear about their strategy, and has not been wishy-washy, going “around the houses”. Second, the decision to proceed with a BI Center of Excellence (CoE) had already been taken by BSG, with or without a Cognos element in the operation, and the intention of BSG to discontinue selling Cognos under their existing Agreement was clearly articulated to Cognos on June 10, 2007. I appreciate Mr. Morrison’s comments on BSG’s capabilities and potential to deliver on the BI Center of Excellence initiative, but BSG was not exactly looking for an endorsement, approval or support from Cognos for this initiative. Third, Mr. Morrison’s confident remark “We actually terminated the relationship with BSG last week…” needs to be juxtaposed with what has been conveniently left out so that we have a more accurate picture of what really has transpired in proper context. My correspondence of June 10, 2007 to Cognos’ President EMEA, Cognos V.P. UK/Mid-East/S.Africa, Cognos Director Sales, UK/Middle East and Cognos Regional Manager, Middle East (leaving out some of the confidential aspects) was as follows: “Having carefully reviewed the content of the LOU and weighing up all aspects surrounding our business relationship, including the potential conflict in future customer engagements and a general sense of circumspection that I have talked about earlier, it is my considered opinion that our respective business plans and market strategies have simply ceased to dovetail in a congruent manner.” … “Accordingly, I have taken the decision that BSG will discontinue the sale of Cognos products under our existing partnership arrangement and consider a different business model.” … “BSG’s future operations will entail competitive products as well as services related thereto.” “Obviously, we would need to deal with the more immediate issues such as serving formal notice to Cognos, as may be required, announce BSG’s transformed business model to the press as well as customers at the appropriate time, come to an understanding on delivery/execution of projects in progress as well as support of existing customers and settle all mutual obligations. My intent is to approach things amicably and make sure everything is handled in a graceful and professional manner, and I would expect the same reciprocity. This decision is neither motivated by any ill-will nor is it an impulsive assessment of the state of affairs; rather, it is simply based on a detailed evaluation of the best course of action for BSG.” On July 17, 2007, I had informed Cognos in another correspondence that BSG had signed up as an Oracle partner to sell their products and services on a non-exclusive basis and also about our arrangement with Business Objects to provide their customers consulting/professional services. Furthermore, I informed Cognos that it was our intention to become a vendor-neutral, BI Center of Excellence, and BSG would not have a problem in selling Cognos licenses on a non-exclusive basis, as and when an opportunity came about, if that was something in Cognos’ interest as well. I also said that we would welcome the opportunity to sell Cognos licenses as part of our supply chain execution solutions when required by a customer. This supply chain execution unit has been a completely separate business unit within BSG, with its own dedicated independent team since signing up with Cognos. The term of our annual Agreement had already expired in Q1 2007, but since the original distribution Agreement renews automatically for an indefinite period, obviously it had to be terminated in the absence of any meaningful partner relationship in place. So, yes, it is factually correct that Cognos elected to terminate that agreement ONLY AFTER BSG had notified them of their intent to discontinue the sale of Cognos products. If, as Mr. Morrison states, “we actually terminated the relationship with BSG last week, giving them a 30-day notice period to effectively tie up the loose ends,” without giving a compelling reason, then the question that begs an answer is this: Why would Cognos, clear out of the blue, want to “actually terminate the relationship” with a partner whom they recognized with a “Rising Star Award” in their first year in 2006, appointed them as their first and only authorized/certified training partner in the Middle East also in the first year in 2006 and again recognized them for “excellence in innovation, influence, and thought-leadership” with their “Reseller Partners of the Year” award (for Middle East) on May 18, 2007, just about three weeks prior to BSG notifying Cognos about their decision to discontinue? I think a nod is enough for the wise. Bob Dylan may have yielded in his song “lay lady lay” with his now famous line “you can have your cake and eat it too”, but BSG remains as clear as ever that in a fair, win-win business relationship, you can’t have your cake and eat it too – you simply can’t have it both ways. Some vendors, appearing to be nonchalant, will actually be quite cognizant of a partner’s engagement in an opportunity, allow them to continue developing that opportunity, including providing support at considerable cost and then take the business directly when the opportunity presents itself, without compensating the partner even an iota for their efforts. Such practice cannot continue indefinitely and comes with a price. Interestingly, it’s only now, through this article, that I have come to know of Cognos’ strategy – 70% direct and 30% indirect for this region, something they elected not to “nail on the wall” earlier, if I may use Mr. Morrison’s words. In my correspondence to Cognos, I had mentioned that “there has been cause for concern on the part of BSG for the last few months regarding confusion over Cognos’ direct sales strategy in the region and the resulting mistrust and potential conflict it has created”. In some measure, this was the genesis of BSG’s introspection and the desire to alter the existing business model. I also recognized that Business Objects was the dominant vendor in the region by far, with literally hundreds of customers out there (BSG should know, as we sold it to them), many of whom had approached us for professional services but we had to decline due to BSG’s commitment to Cognos. Business Objects themselves have been quite supportive, and this was an opportunity that could not be overlooked. I have some emails from customers and colleagues in the industry asking me for my views on Mr. Morrison’s comment that the split has been a “very amicable divorce”. I am still on vacation folks… and whilst I will be responding to them individually, I did want to voice my views in a public forum. I can confidently say that I will be happy to have coffee with anyone from Cognos on any given day, including Mr. Morrison! I still maintain that Cognos is a great company and has some superlative products and I don’t judge the company by the conduct of a few people. Even with all the concealed resentment expressed in the aforementioned comments by Cognos, BSG would be happy to continue to work with them. But my gut feel tells me that the chances of us working closely together in future are about as probable as two full moons in a calendar month. This is the one time I really hope I am proven wrong! Adios… Nasser Tufail, Managing Director, BSG

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