Business intelligence (BI) is a hot area in the software space. For instance, Oracle (NASDAQ:ORCL) plunked down $3.3 billion for Hyperion back in March. Yet for BI players like Cognos (NASDAQ:COGN), recent shareholder returns have been mostly lackluster.  

BI allows companies to improve the analysis of their databases and applications. With customers like and Home Depot, Cognos is one of the leaders in the space.

Late last week, Cognos reported its fiscal Q1 results. Revenues increased 9% to $236.7 million and net income rose 54% to $22.4 million. License revenues were up about 3% to $75.7 million. While this is somewhat light, the Q1 period is historically the weakest for Cognos. Despite this, the Cognos 8 product line saw a 10% increase in license revenues to $48 million.

But the outlook is promising; over the past year alone, the company has added 50 new sales reps, for a total of roughly 390. It has also focused on integration partners like IBM (NYSE:IBM), Accenture (NYSE:ACN), Bearing Point, and Deloitte.

On the development side, Cognos has launched some innovative products lately. One is Cognos 8 Go! Mobile that allows access to Research in Motion (NYSE:RIMM) BlackBerrys. Another cool product hooks into Microsoft (NASDAQ:MSFT) Excel.

Cognos is still in the process of transitioning to a new line-up of products, and the process can be disruptive. But with a larger sales force and a bigger partner footprint, it looks like Cognos is positioned nicely for growth -- and perhaps an end to its meandering stock price.


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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,831 out of 31,077 in CAPS.