Analysts to Discuss Shifting Business Intelligence Landscape at Gartner Business Intelligence & Information Management Summit in Singapore, 14 March 2008
For the third year in a row, business intelligence (BI) applications have been ranked the top technology priority in the 2008 Gartner Executive Programs survey of 1,500 chief information officers (CIOs). According to Gartner, this is because CIOs know they must implement a BI strategy properly if they want to accomplish many other priorities, such as customer service improvement and legacy application modernisation.
Speaking ahead of the Gartner Business Intelligence & Information Management Summit at the Suntec International Convention Centre in Singapore on 14 March, Gartner analysts said that the market for BI software would remain healthy but is facing radical change as acquisitions, new delivery models like software-as-a-service and emerging social software tools are accelerating innovation in the sector.
Revenue for BI software vendors in Asia Pacific is expected to top US$399 million in 2008 and reach US$577.6 million in 2011, with a five-year compound annual growth rate (CAGR) of 15.5 percent. "Greenfield" opportunities, together with fast economic and structural developments, are fueling higher growth in Asia Pacific countries than in Europe and North America. Worldwide growth rates are slowing, and will move into single-digits beyond US$7 billion by 2011, with a five-year compound annual growth rate (CAGR) of 8.6 percent.
“The days of strong double-digit growth in the global business intelligence market are over, as the industry enters a state of flux following vendor consolidation, increasing maturity and price erosion,” said Bhavish Sood, Gartner senior research analyst. “However, BI remains critical for businesses as it turns information into an asset for insight and decision making, especially in high-growth markets in Asia.”
The acquisitions by Oracle (Hyperion), SAP (Business Objects, still pending) and IBM (Cognos, still pending) in 2007 were disrupters for the market, which, if they are finalised, will eliminate all larger publicly traded BI companies. Overall, more than two-thirds of the current BI market is now attributed to the mega-vendors. The remaining BI powerhouse vendors SAS, Microstrategy, Information Builders, and more so, smaller BI vendors, such as Arcplan, Panorama, or Qliktech, will need to increase market push to stay visible above the increased noise from the ‘big four.’
According to Gartner, value to users can also increase as a result of mergers and acquisitions in the market. “Consolidation activities by SAP, Oracle, IBM and Microsoft should help accelerate the value derived from BI,” said Mr Sood. “Large vendors will drive increased usage, while new BI vendors will emerge introducing innovative technology and products to demonstrate differentiation and fill the gaps in the mega-vendors product lines.”
Gartner advises end users of BI solutions from vendors that have been recently acquired to hold strategic investments until a product roadmap has been clearly presented from the vendor. While there is no doubt that the acquired core products, such as Oracle’s Hyperion Essbase, Business Objects XI, or Cognos 8 will remain highly strategic and supported by extensive research and development funding, overlapping products in a vendor’s portfolio may see some defocus in the mid-term.
Can Pure-Play BI Vendors Succeed?
Mr Sood said that increased BI innovation means that query, reporting and online analytical processing (OLAP) capabilities have reached parity and no longer deliver a competitive edge. Most vendors now include these basic BI capabilities in their product stacks, including Microsoft which has added more BI functionalities in SQL Server 2008, Office 2007 and PerformancePoint Server.
Successful pure-play BI vendors will incorporate emerging technologies in BI such as dashboards, predictive modelling, enterprise search, social software, interactive visualisation techniques and in-memory analytics. Hosted BI through software-as-a-service (SaaS) is one new approach being pioneered by a cluster of vendors including Seatab and LucidEra. Vendors can also thrive by specialising by industry or geographic region. In addition, smaller organisations are becoming an important target market for BI vendors, with a large proportion being new opportunities.
For more information about the Gartner Business Intelligence & Information Management Summit and a full agenda, please visit www.gartner.com/ap/bis
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