November 2003

PowerHouse futures face diverging destinations

Development language mounts new version as migration suite emerges

As Cognos prepares to talk up a new version of its PowerHouse application development tool, the HP 3000 installed base is starting to hear about an alternative which promises to automate the migration away from the veteran fourth generation language.

By some estimates several thousand sites are using the Cognos products PowerHouse and Quiz, more on the HP 3000 than all other platforms. But much has changed about computing since the heyday of such automated development tools. The ascent of Microsoft’s Visual Basic platform and .NET has mirrored the drop in growth for PowerHouse installations. To respond, Cognos has followed the market’s shift toward Windows, shifting its focus toward its Business Intelligence (BI) product line, a string of Windows-based reporting and analysis tools that operate with the leading relational databases.

Riding the strength of its BI products, Cognos reported rising revenues and profits for its quarter ending Aug. 31. The company posted sales of $158 million, up from $129 million one year ago, and earnings increased from $13.7 million to $18.2 million. BI products like ReportNet — a new Web-based reporting application that develops and delivers business reports and competes with tools like Crystal Reports — make up the majority of Cognos’ revenues.

But the majority of the HP 3000 customers who use Cognos products rely on PowerHouse, the business generated by the company’s ADT division. Some firms have an investment in PowerHouse that goes back more than a decade. Some share of those companies are looking at a future without the product.

That vision of development without a familiar 4GL concerns the organizations who may move away from PowerHouse when their HP 3000s are put out of service.

“This product is without question one of the most reliable development tools I have worked with in my 18 years of software development,” said Jennifer Grimes, an information analyst with the City of Spokane, Wash. “Unfortunately, our MIS department has determined that it is in the city’s best interest to gradually move all systems currently residing on the HP 3000 to another platform within the next several years. And it seems as though migration may not be an option.”

While Grimes added that “the Cognos company is outstanding in every aspect,” some customers continue to struggle with the Cognos pricing model, even after the company revised it in 2001.

“As 3000 customers migrate they are as likely to migrate away from PowerHouse as they are from the 3000,” said John Pickering, a PowerHouse consultant working at a North American wood product manufacturer.

Bob Berry, the director of customer operations at Cognos, said pricing on upgrade fees hasn’t generated a lot of customer complaint. “We haven’t had a tremendous amount of push-back. You always get customers who push back, but it hasn’t been bad.”

But those issues over PowerHouse’s upgrade fees are being brought into focus this year while companies upgrade their HP 3000s for the last time. Cognos, like many HP 3000 software suppliers, collects new revenue when a customer increases their HP 3000 performance through an upgrade. PowerHouse sites, especially those using Quiz as a report writer, have chafed under those upgrade fees.

“We have two HP 3000 systems, 989 and 969,” said one manager who wanted her name withheld. “I looked into replacing one of them with an N-Class and Cognos wanted $100,000 for Quiz and would not talk about an upgrade rather than a new purchase. That $100,000 was number one among the deal-killer issues. I look forward to being on a platform where we can use some other report writer.”

Berry believes the applications built with PowerHouse will survive the changes in the 3000’s market. These “legacy” apps, as Berry calls them, will outlast the 3000’s transition.

“They may be choosing to maintain their environment as it exists today, and migrate in three to five years,” he said. “Or they will keep those legacy apps on the 3000 box in the corner of the room and it will run forever, and they’ll take on some kind of high-falutin’ application company-wide. These legacy apps will always be there.”