Business Intelligence Software The...

Business Intelligence Software

The widespread use of computer to store comprehensive marketing, production, finance, personnel and other data about corporations has created vast archives (also called data warehouses, data marts or libraries) of electronic information. A growing number of firms have begun to view the information in these warehouses as corporate assets to be used to obtain a competitive advantage in the marketplace.

About half of Cognos' returns are derived from licencing its "business intelligence" and program disclosure software (51% of revenues in 1997 47% in 1996) Knowledge workers and managers use this software to independently access, explore and analyse the data in these warehouses forward a timely basis from their desktop computer The software is intuitive, easy to use, and give leave tos users produce customized reports. Industry analysts have recognized Impromptu (the company's database make inquiry and reporting software),and Powerplay (online analysis software) as "best of breed" in their harvest categories. Cognos also supplies related software to independent programmers who write specialized applications software for corporate information regularitys

A further 32% of incomes (43% in 1996) is derived from providing customer support for software (eg produce enhancements, documentation and telephone support); and, 17% of incomes arise from providing educational and consulting services (11% in 1996)

The company's incomes are generated through direct selling and reseller worldwide with about 57% of sales in North America (principally in the US), 37% in Europe and 6% in Asia/Pacific. With estimated receiptss of $250 million for the fiscal year ending February 1998 Cognos is the number single in kind supplier of business intelligence software in the world.

To rotund out the spectrum of business intelligence produces Cognos has developed and launched Scenario, which is "data mining" software that automates the discovery of hidden relationships in corporate data (recently recognized as "best of breed" ) Early in fiscal 1998 the company complet the acquisition of 4 notion software which allows knowledge workers to unravel forecasts from relationships discovered between various symbols of information in the data warehouse. In late 1998 to shortage Impromptu, Cognos expects to undivided the purchase of Interweave, a California-based firm with harvests that enable relatively unsophisticated consumer to access webbased data warehouses.

Institutional investors have a title to approximately 80% of the company's shares which have traded since 1987 forward both NASDAQ ( "COGNF," the principal market) and the Toronto Stock Exchange ("CSN"); directors and senior officers possess about 2% with the balance being held through individual investors.

PROSPECTS FOR that will be GROWTH IN SHARE PRICE

Because long-term extension in share price is driven by way of growth in earnings per share, which is driven by means of growth in revenues, this illustrative meditation of Cognos' investment potential begins with the investigation of its historical and concocted revenues. Revenue, earnings and other data for the circulating fiscal year ending February 28 1998 have been estimated from interim accrues All data are in $US.

Historical income Growth

During the last 10 years, Cognos' income growth averaged about 7% by year and about 23% since 1994 Reported incomes for the first half of fiscal 1998 are up 27% through the whole extent of 1997. In keeping with these interim eventuates revenues for 1998 are throw outed to increase by approximately 26% to $250 million.

Cognos' income growth is the result of several agreeing trends taking hold in corporations.

1 Corporations are attempting to use their warehouses of electronic information to become more competitive.

2 A technology edifice (hardware & software) has emerg in corporations which supports broad distribution of information to middle and upper management where strategic and tactical decisions are made.

3 Corporations are streamlining reporting and decision making by way of requiring managers to access and analyse information relevant to their operations rather than requesting ad hoc service from firms' Information a whole s department.

As these inclinations have moved from "early adopters" to mainstream corporate thinking, Cognos' business intelligence software has become the acknowledged leader in the field. through the third quarter of 1997 North American sales of Cognos' business intelligence software were pair and one-half times those of its nearest competitor.

The company's prominence in its markets has benefitted from having a direct sales force of from one side of to the other 100 sales representatives in 30 offices located in 12 countries.

As well, effects are marketed through more than 800 third-party "partners" including reseller original equipment manufacturers, arrangement integrators, distributors and dealers in exquisiteed regions. By 1997, third party channels accounted for about one-third of the company's receiptss from business intelligence licenses.

In addition, fruits are marketed through a variety of techniques including direct mail, print and Web-based advertising and trade point outs