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Gartner Sees A Buyer's Market In Business Intelligence

However, the research firm is also warning against the risk of dependency on a single vendor's product stack, and is cautioning organizations not to buy more software than they need, despite the attractive rates.
Gartner is advising clients that it is a buyers' market in business intelligence, and they could continue to invest in the technology, despite the economic downturn.

Speaking ahead of its Business Intelligence Summit, scheduled for next week in The Hague, Netherlands, Gartner said companies should look beyond the up-front costs of BI and consider total cost of ownership when making purchases.

The research firm, however, also warned against the risk of dependency on a single vendor's product stack, and cautioned organizations not to buy more software than they need, despite the attractive rates.

Gartner says companies' focus should be two-fold when investing in BI. First, they should concentrate on the bottom line, such as profit margins and operational effectiveness, particularly when there is smaller scope to grow the top line.

"In addition, they need to review the BI tools they already have – an audit might reveal they have more BI than they thought, particularly as it increasingly comes embedded in other business software," Gartner analyst Dan Sommer said in a statement.

Mega-vendors are slowing revenue growth in the BI market, but boosting usage by bundling the software tools into their product stacks as a low-cost or free value-add, Gartner said. The technology is being integrated into infrastructure applications and processes that customers are already working in, such as email, spreadsheets and other business applications.

To compete, smaller vendors are leading improvements in usability through mash-ups, visualization, search, Web 2.0, rich Internet applications and in-memory analytics.

Large vendors are countering the threats of smaller rivals by offering creative financing deals, such as free credit or payments by instalments, which smaller companies can't match, Gartner said. Such deals are unusual in the software market.

Innovation offers small vendors the best chance to stay competitive, and they should focus on providing levels of scalability, usability, advanced functionality and customization thatmega-vendors can't match.

In general, all BI vendors need to improve and clarify the business case for their software to an audience outside of the IT organization, Gartner said. This approach is key in the current tough selling environment brought on by the economic downturn.

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