Microsoft Gains, Business Objects Falls In BI Market Share

The pure-play business intelligence vendors better watch out. While their respective shares of the BI market barely moved last year, Microsoft and Oracle both made big gains.

Microsoft's share increased a full percentage point to 7.7 in 2006, according to a new report by IDC, while its BI revenue grew 28.1% to $480 million.

Market leader Business Objects, meanwhile, moved backwards. Its share dropped from 14.9% to 14.3% last year, and its revenue grew 7% to $893.6 million. Not too impressive, considering the overall BI market grew 11.5% to $6.25 billion. IDC defines the market as query reporting and analysis tools, which make up the largest share, plus advanced analytics such as data mining and statistics.

The market's No. 2 vendor, SAS, fared much better, with its share of the market rising from 10.4 to 10.9 and revenue up 16.6% to $678.9 million. But No. 3 Cognos also lost share, moving from 10.1 to 10.0. And, like Business Objects, it did not keep up with the industry average on sales, with its revenue increasing just 9.8% to $622.3 million.

IDC broke out Hyperion and Oracle as separate vendors in the report, even though Oracle recently completed the $3.3 billion acquisition. Hyperion came in No. 4 after Microsoft with 5.2% of the market, barely moving since last year's 5.1% share, and revenue up 12.3% to $322.3 million. But combined with Oracle's market share of 3.3, flat over last year, Oracle/Hyperion would push out Microsoft to be ranked No. 4 in the market with an 8.5% share. Separate from Hyperion, Oracle BI kept pace with the market's overall growth, with revenue up 11.7% to 206.2 million.

Microsoft has been particularly vocal about its BI plans this year, holding its first conference on that category of software tools in May. Software it sells that falls within IDC's definition of BI include its ProClarity software and the BI tools bundled with SQL Server. Microsoft ranked No. 3 in reporting and analysis tools, with 27.7% revenue growth, and No. 6 in advanced analytics, with revenue growth of 40%.

Among the up-and-comers in the category, QlikTech saw a 97% growth rate, with $43.6 million in revenue last year, and Panorama Software grew 66.5% to $37.8 million. IBM reversed a decline in market share in 2005, with BI revenue up 12.2% to $71.9 million last year.

Besides Business Objects and Cognos, vendors that did not keep up with the average revenue growth rate included Information Builders (7.1%), Actuate Corp. (9.8%), and Visual Numerics (7.5%).

Dozens of other BI vendors made up the "other" category, with total 2006 revenue of $1.91 billion. Demonstrating the impact of consolidation, the market share of the "other" category dropped from 33.5% to 30.6% in two years, while revenue growth for the category averaged 6.6% in 2006.