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Cognos: Another one bites the dust, eh
Yesterday, IBM announced it intends to acquire Cognos. Cognos was a leader in business intelligence for large F500 type companies. It was also one of a handful of remaining large Canadian technology companies. As an operator, I'm indifferent. This deal makes a lot of sense. But as a Canadian, it's tough to see so many of our tech leaders get swallowed up.
Cognos follows in the wake of many others, such as Hummingbird, Jetform and most recently, ATI. There are now just a tiny handful of large, public Canadian tech companies. RIM has certainly shown that we can do it. With our strong economy and crazy-strong dollar, I'd love to see us eat rather than always be eaten.
This dynamic in the Canadian public markets has implications for us startup folk. Without a critical mass of Canadian tech companies, we have fewer exit alternatives and a much smaller ecosystem to help us grow to become big.
For example, an offering on TSX as a 1st step towards dual listing on NASDAQ becomes impossible if Canadian institutional investors are not allocating funds towards Canadian tech because there is none. This is often a good way for Canadian tech companies to get into the public markets and generate stock liquidity early.
Similarly, the absence of large Canadian tech companies hurts our ability to attract people, especially in the management ranks, who have seen scale. If they've seen true scale, chances are good they're not in Canada any more.
Anyway, I'm happy for Cognos' shareholders. IBM is paying 40x earnings. Still, I hope more Canadian companies are waiting in the wings to become visible, thriving and independent players in the Canadian technology public markets.
Cognos follows in the wake of many others, such as Hummingbird, Jetform and most recently, ATI. There are now just a tiny handful of large, public Canadian tech companies. RIM has certainly shown that we can do it. With our strong economy and crazy-strong dollar, I'd love to see us eat rather than always be eaten.
This dynamic in the Canadian public markets has implications for us startup folk. Without a critical mass of Canadian tech companies, we have fewer exit alternatives and a much smaller ecosystem to help us grow to become big.
For example, an offering on TSX as a 1st step towards dual listing on NASDAQ becomes impossible if Canadian institutional investors are not allocating funds towards Canadian tech because there is none. This is often a good way for Canadian tech companies to get into the public markets and generate stock liquidity early.
Similarly, the absence of large Canadian tech companies hurts our ability to attract people, especially in the management ranks, who have seen scale. If they've seen true scale, chances are good they're not in Canada any more.
Anyway, I'm happy for Cognos' shareholders. IBM is paying 40x earnings. Still, I hope more Canadian companies are waiting in the wings to become visible, thriving and independent players in the Canadian technology public markets.
Comment
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Comment by jhaidar on December 7, 2007 at 6:35pm
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Great post! I couldn't agree more. The strength of Silicon Valley cames from the 'big players' providing a fertile ground and ecosystem for the young start-ups to thrive. Without anchor companies we'll never see an established Canadian powerhouse start-up community.
Then again, when you get offered billions it's hard to say no. Congrats Cognos! Now it's time for those exiting to start another Canadian success story.
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