Cognos has just bought Applix, whose TM1 product was a pioneer in the in-memory database market. Applix has been highly profitable, aiming at volume sales to the mid-market financial analysis market, with a typical sale price well under USD 100k. However it had revenues of USD 61M in 2006, and is likely to show modest growth on that in 2007 (maybe USD 70M revenues) but with a yummy operating profit margin of 24%. Cognos now has an amusing range of OLAP engines, that within Powerplay, the one that came with Adaytum, and now this one; at this stage it is unclear whether these will all continue or whether some sort of consolidation will occur in the long term.

The interesting thing about this purchase was the price: a hefty USD 339M (USD 306M if you strip out the cash in Applix’s bank account that Cognos will acquire). At five times trailing revenues and four and a half times forward revenues this is a very healthy premium indeed. The backers of Qliktech in particular, which is based on a similar engine but has far stronger growth than Applix, must be rubbing their hands in glee.

Cognos has just bought Applix, whose TM1 product was a pioneer in the in-memory database market. Applix has been highly profitable, aiming at volume sales to the mid-market financial analysis market, with a typical sale price well under USD 100k. However it had revenues of USD 61M in 2006, and is likely to show modest growth on that in 2007 (maybe USD 70M revenues) but with a yummy operating profit margin of 24%. Cognos now has an amusing range of OLAP engines, that within Powerplay, the one that came with Adaytum, and now this one; at this stage it is unclear whether these will all continue or whether some sort of consolidation will occur in the long term.

The interesting thing about this purchase was the price: a hefty USD 339M (USD 306M if you strip out the cash in Applix’s bank account that Cognos will acquire). At five times trailing revenues and four and a half times forward revenues this is a very healthy premium indeed. The backers of Qliktech in particular, which is based on a similar engine but has far stronger growth than Applix, must be rubbing their hands in glee.