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Gartner: Growth Slowing In BI Market

The worldwide market is expected to slip into the single-digits by 2011 as the market matures and consolidates.
Double-digit growth in the business intelligence market is expected to end by 2011, due in part by consolidation among vendors and market maturity, a research firm said Monday.

The worldwide market in 2007 grew by 12.5% over the previous year, which was slightly lower than the growth rate for 2006, Gartner said. By 2011, the market is expected to post a growth rate in the single digits, or just more than $7 billion. Starting in 2011, the five-year compound annual growth rate is expected to be 8.6%.

Among the trends in the industry is how query, reporting and online analytical processing capabilities are no longer a competitive edge for vendors, Gartner said. Most vendors include these basic BI capabilities in product stacks. Microsoft, for example, has added more BI functionalities in SQL Server 2005, Office 2007 and PerformancePoint Server. The same is true for SAP and Oracle, which have recently bought BI companies.

Remaining pure-play vendors are expected to recruit other software vendors as adopters of their BI platforms to provide analytical applications. Pure-play BI companies could also leverage relationships with value-added resellers for domain-specific products.

"Consolidation activities by SAP, Oracle, IBM and Microsoft should help accelerate the value derived from BI," Gartner analyst Dan Sommer said in a statement. "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 mega-vendors' product lines."

Emerging BI technologies expected to be incorporated in the products of pure-play vendors include dashboards, predictive modeling, enterprise search, interactive visualization techniques and in-memory analytics, Gartner said. Software-as-a-service is one new approach being pioneered by some vendors, such as SeaTab and LucidEra.

Last year's buying spree of BI vendors by Oracle, SAP and IBM is expected to leave more than two-thirds of the current BI market in the hands of the mega-vendors, if all the acquisitions are approved by stockholders and regulators. Oracle has bought Hyperion, but SAP's purchase of Business Objects and IBM's acquisition of Cognos are still pending.

The largest pure-play vendors, such as SAS, Microstrategy and Information Builders, as well as small companies, such as Arcplan, Panorama and Qliktech, will need to boost marketing to remain visible above the "big four," Gartner said.

North America, Western Europe and Japan are expected to account for five-sixths of BI software revenue by 2011. However, double-digit growth is expected in other regions, such as Asia/Pacific, Eastern Europe, the Middle East and Africa, and Latin America.