Dave Kasabian's Pervasive Performance Management Blog: Will IBM Acquisition Leave Clarity Clients Feeling Warm and Fuzzy or Out in the Cold?

Pervasive Performance Group Blogging on BI and Performance Management Practices

Will IBM Acquisition Leave Clarity Clients Feeling Warm and Fuzzy or Out in the Cold?

I just returned from a vacation in warm and sunny (if not a bit flooded, see picture) Aruba to the cold of the Northeast and it got me thinking about IBM's acquisition of Clarity Systems a few weeks back.

I wonder: do Clarity's clients feel left out in the cold?

Becoming Big Blue
Are Clarity clients happy to one day be a client of a small, canadian, founder-owned, finance

software specialist and the next day find out they are part of the $90B ecosystem that is IBM? I guess the answer is (spoken as a true consultant) "that depends". It depends on which of Clarity Systems' two products the clients own and how IBM assimilates the products and clients into their ecosystem and supports them going forward. Some will miss the hand-holding and attention they got from Clarity, others will welcome the breadth of BI and Performance Management offerings that IBM brings to the table with Cognos10 and look at this as an opportunity to expand the Performance Management footprint beyond the office of the CFO.

A Smart Move by IBM

The acquisition makes complete sense for IBM. They actually filled two holes in their Financial Performance Management (FPM) offering on the same day by completing the acquisition of GRC vendor OpenPages to enhance its risk management capabilities and announcing the acquisition of Clarity and its Financial Statement Reporting (FSR) product for Financial Governance and automated external reporting.

Clarity FSR was the first product to target automating the financial close and has had good traction and very strong customer satisfaction over the last couple of years but the window of opportunity was starting to close as competitors big (Oracle) and small (Longview) have released financial close automation products this year. The timing was right for Clarity to hand the reins over to IBM to exploit this market more quickly and broadly than Clarity would ever have been able to on its own.

What about Clarity Corporate Performance Management?

However, Clarity's core product was Clarity 7 its Corporate Performance Management (budgeting, planning, consolidation, reporting etc.) product. IBM has been very clear in their interactions with the analyst community that Clarity 7 will not replace its existing offerings for performance management. Clarity 7 will be supported and planned releases will go on as scheduled but Clarity 7 is not the direction of its performance management strategy.

Should Clarity Clients Jump Ship? Not Just Yet

I've heard other analysts say that existing Clarity CPM (Clarity 7 and Clarity 6) clients should start thinking about moving to another solution now and that Clarity CPM is a "dead product". I wouldn't go quite that far. But these clients should be talking with IBM about the product road map and what incentives they will be given to move to IBM's FPM products. The reality is that these clients have no allegiance to IBM and without incentives will consider other options when the time is right. In fairness to these clients (and in an effort to retain them) IBM should be forthcoming with plans for migrating existing Clarity CPM clients to IBM Cognos FPM solutions and provide some amount of credit towards these solutions for existing Clarity CPM clients.

Good for IBM and Good Clarity's Competitors
This is a great move by IBM but it also creates opportunity for other vendors. By acquiring Clarity, and announcing that Clarity 7 is not in its strategic direction, IBM has essentially eliminated the vendor at the top of the CPM-specialist food chain. The big winners in this are the remaining independent vendors that used to compete against Clarity 7 such as Host Analytics, Tagetik, Exact/Longview, Adaptive Planning and Prophix.