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Is the BI Software Market Maturing?
IDC just published its latest reportWorldwide Business
Intelligence Tools 2005 Vendor Shareson the
state of the business intelligence industry . According to IDCs
research, worldwide software revenue
grew 11.5% in 2005 to $5.7 billion.
IDC expects the market to maintain this level of growth for the
foreseeablefuture," said Dan Vesset, IDCs Business Analytics
research director and the
reports author. "Although there are signs of a shift in the
competitive landscape,
BI tools remain an attractive market for software vendors and
one of the top
investment priorities for end-user organizations."
The two subjects of interests are the growing business demand
for business intelligence and the
competitive marketplace for software vendors.
The report states that business intelligence is something
without which organizations cant succeed.
However...(it) still has a long way to go in reaching all the
necessary people and processes in
companies, government agencies, hospitals, and universities.
Therein lies the exciting promise of BI that is building upon
its own successes. BI has enabled greatbusiness value at many
companies, but its impact is really just beginning to be felt. Up
until now
business implementations have targeted analysts, managers and
power users within enterprises, but
broader adoption is starting to take hold in the remaining 80%
of enterprises employees.
Compliance, competitive pressures and intercompany connectivity
between customers, suppliers and
partners are all business drivers for wider BI adoption. In the
short term, performance measurement
and operational BI projects are expanding BIs business breadth
and depth. In addition, these tools
have become cost- and resource-effective to start penetrating
the SMB (small-to-medium)
marketplace.
The reports message on the software vendor landscape is
that the market is maturing and consolidating (just ask
Larry Ellison). It states that the top 10 software
vendorscontrol approximately 62% of the market. Although that
may sound high, it appears to me that it does not approach
other mature industries where the top few companies
control 90% of market. In fact, it surprises people that so
many companies are still selling business intelligence
software today despite the fact that it is such a mature
industry. Many of these smaller software vendors are relatively
unknown despite the fact that they
have quality products that offer tremendous benefits to their
customers,. Smaller software firms are
the source of many innovations in the BI market, and are also
where some of the best software talent
can be found.
But speaking of the 800-pound gorillas, the top five business
intelligence software vendors, according
to IDC, are:
1. Business Objects (13.9% market share)
2. SAS Institute (10.2%)
3. Cognos (9.9%)
4. Microsoft (6.2%)
5. Hyperion Solutions (5.0%)
Consolidation has already occurred from top to bottom of this
industry, but more is likely.
Has business intelligence
reached the tipping point whereit will finally become
pervasivefor enterprises both internallyand externally with
theircustomers, suppliers andpartners?
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The report refers to the battle between standalone BI (BI pure
play vendors) and database-embedded
BI from Microsoft, Oracle (#6, 4/3% market share) and IBM (#11,
2.4%). IDC states that the
database companies have expanded their BI offerings and are
growing at almost double the rate of BI
pure-plays.
I think this trend is happening because the database vendors are
expanding the BI functionality they
offer, BI is a natural extension of their database (and data
warehousing) functionality, and theofferings are a cost- and
resource-effective solution. Remember pure-play BI vendors starting
pushing
aggressively BI consolidation a few years ago, now database
vendors are extending the sales pitch to
suggest the advantages if that consolidation originates from a
companys database vendor.
An interesting observation is thatthe number one BI tool in the
marketplace, Microsoft Excel, is NOT
counted as a BI tool, thus understating Microsofts impact on the
marketplace. My take? Microsoft is a
force to be watched because of:
Microsoft SQL Server 2005, including Analysis and Reporting
Services The acquisition of ProClarity, which will grow its
enterprise applications business and
expanding the role of Excel as a BI interface,
The report states Microsofts impact on the BI tools market
cannot be overemphasized.it willreshape the BI tools market over
the next 15 years.
The business intelligence market is certainly healthy and
growing. Has business intelligence reached
the tipping point where it will finally become pervasive for
enterprises both internally and externally
with their customers, suppliers and partners? Will it become
pervasive in enterprises of all sizes and
not just the Fortune 500? It is an exciting time to be a
business intelligence practitioner.
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