Cognos partners enter PartnerWorld, retain sole software sales rights

Cognos partners are now part of IBM's PartnerWorld community but retain exclusive rights to sell Cognos business intelligence and other products.

This week, Cognos will hold its first big partner and customer conference since being purchased by IBM for $5 billion.

To boil down the news, all 3,000 current Cognos partners will immediately be part of IBM's PartnerWorld program, with access to the partner portal and information therein.

Perhaps more importantly, Cognos business intelligence (BI) and performance management products will continue to be sold through controlled distribution -- i.e., only Cognos partners can sell them, said Mel Zeledon, senior vice president of global alliances for Cognos. The company, since January, is now part of IBM's information management software group.

Others in the 90,000-member PartnerWorld community who want to become Cognos partners must make the grade. "Cognos will control entry to its partner program," Zeledon told SearchITchannel.com in advance of the Cognos Forum.

What most Cognos partners want to know is how much help -- or hindrance -- they can expect from the new parent company, which, after all, fields a huge services organization in IBM Global Services (IGS). Enterprise integrators and value-added resellers (VARs) tend to view IGS with fear and loathing.

Zeledon understands their concern, even as he tries to assuage it. He and other execs will talk to 670 Cognos partners Monday before the larger show opens in Las Vegas.

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First, he insists that the firewall between IGS and IBM's software group, which now includes Cognos, will stop a lot of potential conflict.

"That means we can protect opportunities we're pursuing with Accenture, Deloitte, etc. We lock in with that partner, and that opportunity is then out of bounds for IGS unless a customer says they want IGS to be involved," Zeledon said.

IGS focuses on very large Fortune 100 accounts. "They want very high-end projects, and when you look at the universe of Cognos opportunities, their participation will be a very small fragment, single digits," he said

Cognos' annual sales are now about $1 billion annually, and IBM wants to boost that number considerably over the next two years, Zeledon said.

"Our overall goal is to double our business by 2010 to $2 billion. Toward that end we want to recruit partners but only high-quality, high-value partners who'll invest in certification and training and are committed to building solutions," he said.

"If we hit $2 billion and still have only 3,000 partners, I'll be happy," he added. One way to achieve that goal is for top-tier partners to grow their resources and reach, he said.

Those will be welcome words to partners who have seen acquiring companies try to boost numbers so much that partners end up competing with other partners on price, causing margins to collapse.

Partners like Lou Polisano, CEO of ISA Consulting, a Blue Bell, Pa.-based specialist in business intelligence, performance management and data integration, hopes to hear more at this week's Cognos Forum. ISA already partners with IBM and Cognos, but has heard very little from either company regarding strategy since the purchase.

Most of ISA's business is in companies with revenue in the $500 million to $3 billion range, but it also has a fair number of customers "north of $3 billion." That could fall into IGS's purview.

Currently 55% to 60% of Cognos sales have some partner involvement, a percentage Zeledon said the company hopes to increase.

Muddying the waters a bit in the services discussion is the fact that Cognos has its own services arm, which will continue to operate within IBM's software division. Zeledon said a few hundred of Cognos' 5,000 employees work in services, and the group is limited to 10% to 15% of total deals. He said that "85% of all our deals or revenue is open for partners to implement."

Cognos Services will "reside in the software group and [be] measured on software margins," he said. "It is not our mission to win every single services deal."

He said that stands in stark contrast to unnamed other companies. "I can see it in other vendors who say, 'We have a services organization, we're going to grow that org as much as possible so every deal is fair game.' We're not like that."

Where there is conflict, Zeledon said Cognos will continue to tell affected partners to escalate the problem. "We want to hear about it," he said.

Overall, Zeledon credited IBM with a partner-friendly culture -- a characterization that many former Lotus Notes/Domino partners might contest.

And, some Cognos partners might worry that IBM ownership will taint the ability of Cognos BI and performance management products to work with third-party databases and middleware. IBM fields its own DB2 database and WebSphere middleware.

Zeledon was also reassuring on that point.. "We won't push anyone to sell DB2. We'll provide options. Customers want open and heterogeneous, multiple databases. One of our biggest alliances is with Teradata." Cognos products work with Teradata's data warehouses.

IBM, he maintained, did a good job preserving its own partnership with Teradata even after buying Teradata competitor Ascential Software

The deal was announced in November but closed in January, and it is too soon to tell how it will impact Cognos partners, said Brad Smith, managing partner with JCB Partners, a Denver-based BI consultancy. "We don't really have concerns over IGS any more than we do with Accenture or any of the Big Four," he said.

Market forces will demand that IBM keep Cognos BI tools database- and middleware-agnostic. And that, in turn, will help service providers who advise customers on the best combination of database and business intelligence. JCB works with Oracle and Microsoft databases. "People need independent advice," Smith said.

He thinks the addition of IBM's huge sales force to the mix will lead to more, not less, partner opportunity.

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