Software Vendors See Growth In Data Analysis - InformationWeek

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4/30/2004
03:26 PM
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Software Vendors See Growth In Data Analysis

Microsoft acquisition is latest sign of app vendors' embrace of business intelligence

Data analysis and reporting are fast becoming critical components of operational and database software, providing companies with alternatives to conventional business-intelligence applications from vendors such as Cognos Inc. and Business Objects SA.

Microsoft plans to expand the business-intelligence capabilities of its SQL Server database with last week's acquisition of ActiveViews Inc., a developer of ad hoc query software, for an undisclosed amount. Microsoft will incorporate ActiveViews' technology in its Reporting Services technology built into SQL Server.

Total Systems Services Inc., an electronic-transaction and payment-processing service company, uses SQL Server's Reporting Services to aggregate transactional data and prepare statements and reports for clients. An earlier effort to produce that work using Business Objects' software with custom Java Web services failed, says Tim Kelly, a technology director at the company. "We just couldn't get it to work," he says.

With the ActiveViews acquisition, Microsoft will get what Kelly says is "really powerful" technology that will let Total Systems Services extend graphical query tools to its clients, so they can access their data in whatever format best suits their needs.

chartAt the Gartner Business Intelligence Summit conference in Chicago last week, vendors such as PeopleSoft, SAP, and Siebel Systems talked up the business-intelligence capabilities of their software. Vendors specializing in enterprise-resource-planning and customer-relationship-management applications are improving how their business-intelligence software handles data generated by competitors' applications. Those offerings are a viable alternative to standalone business-intelligence applications for established customers of those vendors, says Gartner analyst Howard Dresner.

Dresner predicts that by next year, 70% of SAP customers will be using SAP's data-warehouse system, called SAP BW, for decision support. Meanwhile, sales of Siebel Analytics, Siebel's line of analytical applications, grew 80% in the last year and account for 20% of the company's revenue, says Paul Rodwick, Siebel Analytics' marketing VP.

LinkShare Corp., which provides online marketing services, uses custom analytical applications built on Siebel's Enterprise Analytics Platform to analyze the 10 terabytes of data in its data warehouse, says Michael Martinov, LinkShare's business-intelligence and analytics VP.

Yet despite the growing competition from enterprise-application vendors, sales remain strong for conventional business-intelligence vendors. MicroStrategy Inc. last week reported year-to-year revenue growth of 31% for its quarter ended in March, to $49.1 million. Also last week, Business Objects reported year-to-year revenue growth of 83%, to $217 million, for its latest quarter, although CEO Bernard Liautaud acknowledged most of the growth came from its recent acquisition of Crystal Decisions.

Cognos CEO Ron Zambonini dismisses Microsoft's SQL Server Reporting Services as a serious competitor, saying those tools are designed for small businesses. Still, it seems any vendor selling business-intelligence capabilities stands to see good demand: Gartner predicts an 8.5% increase in total business-intelligence software sales this year.

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