Data explosion caused by enterprise deployments challenges BI vendors
By Staff -- Manufacturing Business Technology, 5/1/2006 12:00:00 AM
Leading business intelligence (BI) vendors in Stamford, Conn.-based Gartner's most recent Magic Quadrant for BI—e.g., Business Objects, Cognos, Information Builders, and SAS Institute—ought to be eager to see how the year plays out. Gartner says BI is the top software priority with CIOs for 2006, with license revenues projected to grow 6.2 percent worldwide to $2.5 billion.
But there are plenty of challengers, with Microsoft, Oracle, and SAP the close contenders.
And there's plenty of room for growth, according to a survey from Chicago-based Knightsbridge Solutions that polled business and IT professionals. Of the respondents, 50 percent say their organizations are at the lowest level of BI maturity, with much attention being focused on basic data access and consistency across companies of all sizes.
"The biggest driver is regulatory compliance," says Colleen Graham, a principal analyst for Gartner. "There was a certain amount of work that initially went into Sarbanes-Oxley, but there is continuing investment to refine systems. The second driver is what we call the data explosion. Organizations have invested in ERP, CRM, and supply chain management systems, and have been focused on getting them up and running across the entire organization, rather than just lines of business as they did 10 years ago. Now these systems are generating all kinds of data, and companies are looking to use it to better run their businesses."
According to Eric Rogge, a VP for San Mateo, Calif.-based Ventana Research, BI vendors, for their part, are focusing on building out their solutions. "They're extending the functionality of platforms, as well as search capabilities. All are looking to expand into the planning and budgeting realm," he claims.
Pressure is mounting for consolidation of players in the space, Rogge adds. "When big vendors go out to sell, they're positioning their products as being capable of doing everything a Global 1000 company wants to do with business intelligence. This is prompting standardization and consolidation. There's pressure on mid-tier players to seek safe harbor by being acquired."
Oracle's acquisition of Siebel, with Siebel analytics intended as a chief component of its BI offering, makes Oracle still a "dark horse" at this time, according to Rogge. "Microsoft will continue integration of Office with SQL Server with its latest version of Excel. That integration will drive Microsoft deeper into the BI space"—but with marketing challenges, he maintains.
"The biggest challenge with BI technology today—and the biggest challenge it has always faced—is getting at the data," claims Rogge. "In BI systems deployments, the majority of expense is getting to the data, cleaning it, and organizing it in a way that is accessible to BI tools."
While many managers want to use BI for daily decision-making, historically it has been used for strategic analysis. As a result, BI has only penetrated a minority of seats in the organization. Making BI available to more knowledge workers in the daily course of their work, Rogge concludes, promises significant market growth to vendors that master delivery of the necessary data.
