Executive Interview With Cognos CEO Ron Zambonini

On a recent hot sweltering day in New York City last month, Cognos CEO Ron Zambonini opened the Nasdaq exchange. These have been good days for Zambonini, who's seen sales of Cognos business analytic tools grow significantly in the past year. Now the company is about to launch a significant new product called ReportNet. Built from the ground up, observers say it is a major leap in reporiting technology overall. VARBusines senior editor Jeffrey Schwartz caught up with Zambonini in New York, just hours after his ceremonial opening of the Nasdaq.

VB: How do you see the BI market shifting?

Zambonini: We see the market growing toward corporate performance management, which is really the ability to put the strategy of a company, understand what's important within that strategy, identify the key performance indicators and really create scorecards for everyone's desk, showing how well they're doing against that KPI.

VB: Even though many of these applications provide key performance management metrics, how is the downturn in IT spending affecting sales and the way you go to market?

Zambonini: It's very tough but BI has really done better than the normal software market because of the quick returns. People are spending less. But they're spending smarter. You can get a quick return on that and by quick I mean six months. I cannot sell any software today unless there's some sort of proof of concept that the company is going to derive its money back in six months,plus an ongoing benefit.

VB: Is this tougher environment affecting your partnering strategy with VARs and systems integrators?

Zambonini: We've got about 2,000 partners, a lot of them are small and medium sized companies with maybe five to 50 people. In fact, that channel has picked up. I think that's an early indicator that spending is coming back a little bit. We got hit hard during the beginning of the downturn. The most important thing we can do for them, and for the OEM channels, is to make good, open products. This new product we are launching in September, Cognos ReportNet, has really been written from the ground up as an open product. We actually had VARs really involved with it. This is a little bit of an indictment of our past products because we really were focused on the enterprise market. Sometimes when you do that, you really forget to leave the hooks and places for your VARs to connect. Thanks to technology, like XML and Web [services] this product is very embeddable. I think it will really help our attack our VAR channels better than we did before.

VB: Do you have any programs or plans in place to help capitalize on that? Perhaps change the nature of those relationships or add more VARs?

Zambonini: Our mix is 70 percent direct and 30 percent indirect. I think with this new product set and the product sets that follow it. I would hope to increase that. I see our VAR channels growing faster than our direct channels over the next three years.

VB: What kind of breakdown do you envision?

Zambonini: I don't think we'll ever get to 50-50. But I think 60-40 is attainable over the next few years. We've got a lot of really great partners right now. We'll certainly add some but I would say the emphasis is to make our present partners more successful, rather than adding a lot of new partners. We've got good coverage. By giving them a better products and more customizable products, that's the idea we should go after.

VB: What's your take on Business Objects buying Crystal [and Hyperion buying Brio]?

Zambonini: Obviously we had the same opportunity and chose not to go that way because I think customers are looking for a single solution, not a single supplier. So having a truly integrated architecture, I think is the right way to go. Has there ever been a successful merger of the same type of products? Computer Associates bought a whole bunch of ERP systems in the 80s and 90s. I was one of them. And yet Oracle one because it had a single vision and SAP had a single vision. So I think it's important to stick with a single product line. All of those customer sets are going to be disenfranchised. And that represents an opportunity for us.