By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
Angel Mehta: You started Information Builders back before the category of 'business intelligence' even existed…tell me about the early days of the market…how did you get involved in 'business intelligence' applications in the first place?
Gerry Cohen: I actually graduated as an engineer doing what was called, "Operations Research" which is essentially the application of mathematics to business problems. One of my early jobs was with a company that had a customer who needed a lot of information processing. We came out with some code that really was an early version of what we would call today a business intelligence application. We eventually developed that into a product called, "Ramis" and I suppose that I was the original author.
In '75, we formed Information Builders and we released a new product called "FOCUS", a real 4th Generation language…
Angel Mehta: That must have been quite a break through at the time…
Gerry Cohen: It was. So I suppose I'm actually the author of the idea of 4th Generation languages…28 years ago, everything was done in COBOL, so even getting a report was difficult. The system analyst would describe the report to a COBOL programmer, and then the COBOL programmer would write code to get a report. So we said, "Gee that's silly….You ought to have a very simple way of getting what you want! Without using a programmer"….So a 4th Generation Language was a way of using ordinary English to get the report. We were the first English processor, in fact.
Angel Mehta: The demand must have been huge.
Gerry Cohen: It took off like wild fire. In those days IBM mainframe was the dominant player, so we had a HUGE marketplace right there. When the mini computer was introduced, we moved Focus to the mini computer marketplace. When client server came in we moved to the client server….Then of course, when the Internet came in we had success with products like WebFOCUS which would allow a person to use a browser to interrogate a database in real time….
Angel Mehta: So how would you define Information Builders' place in the business intelligence sector?
Gerry Cohen: We're in the space that's probably best called, "Enterprise Reporting" The marketplace has sectors like analytics, OLAP, data mining - we're in the sector that is basically information delivery.
Angel Mehta: You've been CEO of Information Builders for probably over 20 years, which is obviously quite a bit longer than the average CEO tenure. Why do you think you've lasted so long?
Gerry Cohen: First of all, private companies very often have long tenured executives; I'm not unique. A majority of our upper-management team has tenure that exceeds 10 years.
Angel Mehta: Is there something you can point to about Information Builders that has allowed it's executives to stay with the company for that amount of time?
Gerry Cohen: A couple of things. First, we're a private company not a public company. Second, we're New York City-based not Silicon Valley-based. It's a different culture here. Silicon Valley's approach is more of a "get rich quick" mentality. You know, change jobs and get big stock options…cash out and move on. Whereas on the east coast I think there's a somewhat different ethic. It's more of a long-term view, a building mentality. Plus, Information Builders doesn't have these large ups and downs to deal with…our people are not going out looking at their stock price everyday or trying to figure out how much their options are worth. They just focus on creating value.
Angel Mehta: Have you found it more difficult to attract new executives to the management team as a result of remaining private?
Gerry Cohen: No. The only time we had problems was in the height of the dotcom era and everyone wanted options. But now, we've got waiting lists of people who want to come to work for us. Options create other problems. Look at Microsoft. Microsoft lost a whole ton of guys who got rich on their options and just left because they got too rich to bother working. How does that help Microsoft? I mean, do you think they stopped giving stock options out just because the rules have changed? I think they had too many rich guys that just left and said, "I'm rich I don't have to work here anymore". There's a huge change in regards to the people that we used to deal with that wanted options all the time; they're all gone.
Today, we get more stable employees. We treat them well and they like working here. We're not out all obsessed over the next quarters earnings so that everybody's under pressure and worried about getting fired because you didn't make your numbers. Which is not to say that we don't manage earnings or targets - we do. But I think the general culture in the private company is more congenial.
Angel Mehta: So given the opportunity, and obviously you did have the opportunity in the bubble to do an IPO, did you face pressure internally from some of your staff to go public?
Gerry Cohen: Everybody was calling us up and wanting to know when we were going to do it. They were like, 'Gee, you're crazy - now is the time to do it!' And hey, maybe I was wrong…maybe we should have gone public in that era. However, I always say to people: you never know. Nothing is stopping us from doing an IPO in the future…. I don't know what will happen in the next five years. It's likely that some of them could still happen.
Angel Mehta: Many analysts and market watchers continue to hype wireless as the next big wave…the trend that will open up huge opportunity and drive growth for the tech sector. Surely that applies to the business intelligence space as well… what do you think? For example, what are customers telling you about the demand for business intelligence over mobile devices?
Gerry Cohen: Forget wireless. I mean, wireless in the sense of mobile wireless versus wireless enabling enterprise applications, they're two different market places. We built a whole series of products to deliver information to Palm Pilots and hand-held devices - it didn't go anywhere. It was a big fiasco.
Angel Mehta: Why?
Gerry Cohen: Because it wasn't necessary. We were trying to market a 'gee wiz' technology that people didn't need. I don't need to know my sales figures when I'm on the golf course. We're showing them, "Look you can get your sales figures anywhere". Customers were like, "Who cares? I don't need it". It was a solution chasing a problem.
Angel Mehta: What has IBI's strategy been with regards to the integration marketplace? How are you positioned in that segment?
Gerry Cohen: Our business is all about the handling of information. On the BI side, we deliver information to human beings. On the integration side, we deliver information to other processes, to other programs. So in 2001, we created a brand new image for what we called an 'outward facing company', around 'iWAY' Software. Our integration business was put into the iWAY software marketplace and we did several things to make it go. First, we built a whole new setup, new suite of products, primarily Java products and Java adapters. Today we have the largest suite of adapters in the world and we're the largest supplier of adapters in the world. Not just data adapters, but application adapters, technology adapters, etc. We have five different kinds of adapters. And then we have a large number of OEM's who resell our adapters under their names, as well as our direct channel. That has been a very successful business for us because we did it on a large scale. We have more adapters than anybody else and the value of that to customers is that, as a customer, the last thing you want to do is buy two adapters from two different vendors. You want to get one vendor who gives you everything because otherwise you've got to maintain both. Companies don't want a lot of vendors, in general. So having all the adapters was a great strategy. It took a huge investment from us.
Angel Mehta: Did you find any correlation between the end of the war and customer interest in new technology projects?
Gerry Cohen: I can't say. The market has certainly picked up a bit, but I think what we're doing is we're trying to do is show a cause and effect connection which I just don't see. Yes, we're drifting up, but is that really because the war ended? You can only hold back from technology spending so long. Even today, a great deal of technology spending is for real reasons. It's cost reduction…or maybe you have a competitive disadvantage so you have to do something. You can only hold back so long.
Angel Mehta: How has the recent consolidation in business intelligence affected you? What were the drivers?
Gerry Cohen: Well, with the Business Objects deal…they really weren't in the information delivery business - they were in the analytics business. Therefore, we were killing them in the general information delivery business. Them buying Crystal was a clear admission that they didn't have a product in that category, which is just the basic information and delivery product - a basic Internet-based product that you get information on. What these guys had was really a fancy client server product that just happened to work on the Internet, but it really wasn't the kind of thing you would use for reporting.
In terms of Hyperion buying Brio…well, Hyperion was reselling Crystal and I guess they didn't want to re-sell Business Objects…so it was more of a response to competitive forces.
Angel Mehta: Does it put any additional pressure on IBI to make similar moves to just have a bigger footprint?
Gerry Cohen: No, that doesn't matter to us. No one doesn't buy from us because we're not big enough. There is a point where you can be big enough - and we are.
You don't buy a car from General Motors because it's the biggest. You buy a car because it's a better car and you like it. In our market, there are three major players: Information Builders, Cognos, and Business Objects.
We're just going to fight it out and divide up the marketplace. In every marketplace you usually have three main players I had mentioned automobiles; General Motors, Ford and Chrysler in the U.S. That's what we have now in BI. The marketplace has consolidated down to three major players.
Angel Mehta: At this point in your career you're probably in a position to stop working if you want. What keeps you going?
Gerry Cohen: Angel, do you know anyone who really wants to stop working? REALLY?
Angel Mehta: I know people who certainly claim they want to stop working...
Gerry Cohen: Is your father working still?
Angel Mehta: He is indeed.
Gerry Cohen: Okay, why doesn't he stop working?
Angel Mehta: No clue. Just sheer boredom, I suppose.
Gerry Cohen: Exactly. Once a guy stops working, he starts to die. A lot of people have tremendous hobbies and they go off on a second career with that hobby. But if you're not lucky enough to have a second career, you better stick with your first one.
Gerald D. Cohen is President and CEO of Information Builders, Inc., the leader in Web-based business intelligence and the largest software manufacturer in New York City. He also serves as CEO of iWay Software, an Information Builders company and leader in enterprise integration. Feedback on the interview can be sent to: gerald_cohen@ibi.com
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at: amehta@sterlinghoffman.net
