Applix Acquisition FAQ

Today Cognos completed the acquisition of Applix, Inc., a publicly held company based in Massachusetts with operations around the world that specializes in performance analytics with a patented, 64 bit, in-memory multidimensional technology.

This acquisition will be important to Cognos for three reasons:

• First, the acquisition extends our Market Leadership position as a leading independent provider in Financial Performance Management by adding the Applix base of 3000 customers to our existing base of over 3500 customers using our financial performance management solutions. It will also add over 200 performance management experts to the Cognos team across products, sales, services, and customer support, as well as key new partners to our global network with particular strength in the mid-enterprise market.
  
  
• Second, the acquisition will gives Cognos the Broadest Solution Coverage in Financial Performance Management for driving financial performance improvement. Specifically it will expand our ability to address customers challenges in financial performance management by: extending planning capabilities for complex business modeling and analytics; delivering financial performance analysis and optimization against rapidly changing, complex and large data sets with real-time response; and add the ability to address new solution areas like profitability analysis, sales mix, and price / volume variance analysis.
  
  
• Third, the acquisition will further our Technology & Innovation Leadership by adding a widely recognized innovative and leading read/write OLAP server. This patented 64 bit, in-memory multidimensional server allows finance users to perform high performance real-time read-write operations against large data sets eliminating the need for costly and time-consuming data warehouse restructuring with every business scenario or change in the business.

Applix is a publicly held company based in Westborough, Massachusetts, with 200 employees in operations around the world. It specializes in analytics with patented, 64-bit in-memory multidimensional technology. Applix was incorporated in 1983 and has been publicly traded since 1994. Applix has been recognized by numerous industry and analyst groups for its position as a technical and strategic leader in the marketplace, including:

• positioned in the Visionaries Quadrant of Gartner's CPM Magic Quadrant
• its IBM Cognos TM1 engine received top rank for faster, more accurate reporting, goal achievement and aiding better business decisions in The OLAP Survey 6
• designated Number One in customer satisfaction among core BPM vendors in the 2006 BPM Partners BPM Pulse Survey
• recognized as one of the top 10 in Business Intelligence by the DM Review.

This acquisition will complement Cognos' current planning, reporting and analysis solution. First, we will gain improved analysis and optimization of large complex financial performance data. Second, we will benefit from agile self-service capabilities such as scenario creation and business rules management. Third, we will have the ability to address new solution areas including profitability analysis, sales mix, and price / volume variance analysis. Fourthly, our planning solutions are complementary. Applix strength is in centralized, complex, large data and dimension planning. Our sweet spot is in decentralized, driver-based, high-participation planning. In fact, a number of customers have actually deployed both complementary solutions.

Cognos is acquiring Applix because we see value in Applix people and its products, and we expect to leverage the combined strengths and assets of both market leaders, and see great synergies within our teams. Detailed organizational plans will be shared over the coming days by the various functional teams.

Cognos customers will benefit from this acquisition in three major areas. First, customers will gain improved analysis and optimization of large, complex financial performance data. Second, customers will benefit from agile self-service capabilities such as scenario creation. Third, customers will be able to leverage new solution areas including profitability analysis, sales mix, and price / volume variance analysis.

Applix customers will benefit in several areas. First, Applix customers will benefit from the accelerated innovation that will result of being part of Cognos' 900-person strong R&D team. Second, Applix customers will be able to leverage new value from Cognos performance management solutions that can surround and support their Applix deployments. Third, Applix customers will benefit from the broad and deep resources that Cognos has established, such as Cognos proven practices, our community and the thought leadership from the Global Innovation Center for Performance Management, our award-winning support, education and services, and a large diverse partner ecosystem of application, service and technology partners.

Cognos, like Applix, is very focused on customer satisfaction. Our plans call for a smooth and effective transition without service or support disruption. Each functional area has a dedicated Post Merger Integration team consisting of both Applix and Cognos employees. These PMI teams are focused on defining and executing the plans to ensure that we can effectively embrace the new people and product capabilities, grow our Performance Management business and not miss a beat as we do it. The integration begins on Day 1 and will continue through the coming months as we merge our teams, processes and practices. The PMI teams will work under the “Listen, Learn, Lead” banner as we ensure that we are Listening to each other, Learning the best practices from both teams and working to be the Leaders in our space.

A key part of the integration plans includes the formation of a Financial Performance Management Business Unit which will be headed up by Michael Morrison, formerly the COO of Applix. The FPM BU will be responsible for driving the business that includes IBM Cognos TM1, IBM Cognos 8 Planning, IBM Cognos 8 Controller, IBM Cognos Metrics Studio and IBM Cognos Finance. Product Management, Development and Product Marketing will report directly in to the Business Unit. Other functional teams will be closely aligned with their functional counterparts in the rest of Cognos and be a part of the overall FPM Community which Michael will lead. This will provide us with the focus that we need to ensure success in this critical market space, but also allow us to leverage the functional resources in the broader Cognos.

Until Applix customer data has been transferred into our systems, we will be handling support based on the existing Applix support systems. The Cognos and Applix teams will have bi-lateral access into each other's systems but Applix customers will be encouraged to log cases with our Applix team.

Over the next 60 days, management from Applix and Cognos will be reviewing both organizations to determine how best to leverage the combined strengths and assets of both market leaders. Our goal is to create an effective and efficient organization. While it is common to experience some redundancies as two organizations like ours merge, we anticipate very little activity in this regard. The in-depth knowledge and domain expertise that Applix employees have in financial analytics and performance management is critical to fulfilling Cognos' strategic goals for this acquisition and beyond.

Cognos will work with Applix partners to provide and sign the Cognos Partner Program agreements so that they are able to conduct appropriate business depending on their partner type profile. This might include the ability to resell Cognos products in certain specific markets, after they commit to the process of getting enabled and educated to position and sell Cognos products.

Cognos will work with current Cognos resellers, distributors and solutions providers to provide and sign an amendment to the Cognos Partner Program agreements so that they are able to resell Applix products in certain specific markets, after they commit to the process of getting enabled and educated to position and sell Applix products.

The entire senior management team of Applix will remain with Cognos until at least the end of the year to ensure a smooth and successful transition. Additionally, Michael Morrison, the current COO of Applix, will assume the role of VP and General Manager of the Financial Performance Management business unit reporting directly to Peter Griffiths. Ben Plummer will report to Michael in the role of FPM Strategy. Ed Gromann will also report to Michael where he will focus on Customer Advocacy. Jay Howald, Martin Richmond-Coggan, and Paul Constantino will continue to have responsibility for the field operations in their respective geographies.

Read the press release.

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