After the Dust Settles

How does the BI marketplace look now that the merger and acquisition dust has settled?

Can you imagine your organization without business intelligence (BI)? As amazing as it may seem, BI has grown to become a strategic component of your IT portfolio — despite only just beginning to realize its potential. Over the last year, BI's growing pains have begun to slow as organizations begin to understand how the technology can make a difference throughout the enterprise. And as both vendors and customers begin to apply the lessons learned from early BI installations, new opportunities for growth are emerging.

Period of Reassessment

The BI marketplace, after the turmoil of mergers and acquisitions during 2003, has begun to settle down into a period of assessment and a return to basics: Both large and small vendors are creating new corporate and product roadmaps that will better reflect their evolution to strategic enterprise software companies. While some customers may delay new software purchases, waiting to see where the new directions will lead, the weekly "updates" from BI vendors have only been a minor distraction for most companies, which are busy reassessing their own information architectures and BI strategies to better meet the needs of their businesses.

One of the findings of these reexaminations is the need to integrate the new information technology platforms that resulted from the ideas of the '90s with both new and existing architectures. One emerging solution is enterprise information integration (EII), which provides on-demand access to multiple data sources as part of your BI architecture and application server.

Certive and Composite Software provide EII independent of any BI vendor and have now proven their platforms across vertical industries. BI and reporting vendors are also major players in this arena: Actuate has adapted the EII technology from its Nimble acquisition into an information object-based metadata layer for version 8 of its enterprise-reporting platform. Siebel Systems designed its Siebel Analytics with EII in mind from the beginning, and this product has quietly grown from handfuls of customers two years ago to one of Siebel's fastest-growing, and probably largest, product lines in 2004. The challenge for Siebel will be to step outside its own CRM environments and into the mainstream BI market.

Intelligent and proactive information architectures use event- and process-based approaches to measure and monitor operational processes. Tibco Software is primed to capitalize: Its acquisitions of Staffware and Praja have resulted in new products, such as BusinessFactor, which can take advantage of any information bus architecture — IBM's, WebMethods', or its own. Tibco is positioning itself to deliver a new class of BI-like products that not only optimizes individuals' time and the information they receive but also provides the context for them to take action.

Room to Grow

Just as this past year has offered new answers, it has also revealed new questions as the ramifications of past decisions and innovations become clearer.

Product roadmaps. One of the results of the barrage of mergers and acquisitions in 2003 is the realization of just how dramatically they can change a vendor's BI roadmap and direction — and the consequences to its customers. After acquiring Crystal Decisions, Business Objects unveiled a two-year plan for integrating the combined BI and reporting products. Obviously, a longer-term combined product will take even more time to finish, mature, and validate. Hyperion also is staring at many years to fully integrate its Brio acquisition from an administrative and server technology and capability perspective. Only time will tell whether this adjustment period will prove only a minor speed bump for the vendors and their customers and result in the promised strategic BI platforms and suites.

Pricing models. Another area of concern is the inability to determine the total cost of ownership (TCO) of a project over three years. The unfortunate fact is that the pricing variances across vendors are significant. And despite being only one of the criteria for selecting BI for your enterprise, pricing is a major factor that only now is receiving its due attention as it begins to have an impact on vendors and their relationships with their customers. For example, MicroStrategy uses a CPU speed-based pricing model that can unexpectedly hike your project costs if your hardware support team upgrades its CPU to higher clock speeds.

While easily overlooked at the beginning of a BI project, this model can have a significant impact over a three-year time period. If you plan to upgrade your hardware to achieve better user- or data-level performance and scalability, beware. Organizations are starting to pay more attention to the small print and the impact of pricing. Others, rather than making large upgrades, are seeking simpler approaches to improving the performance and scalability of their data warehouses and BI environments. HyperRoll stands out in this arena by improving the performance of environments such as Hyperion Essbase, Oracle Express, and BusinessObjects. This solution extends the life of existing installments, increasing the value of these BI deployments.

Enterprise reporting. The enterprise reporting market offers a diverse choice of approaches. Microsoft Reporting Services is a reporting development environment based on Microsoft Visual Studio environment that requires a significant footprint from an installation, configuration, and training perspective if you're not a Microsoft shop with trained developers. On the other end of the spectrum, Cognos ReportNet is a Web-based solution that can accomplish the majority of an organization's reporting requirements. At the higher end of production level reporting, you have Actuate and Information Builders' WebFocus, which is rapidly growing the company's foothold in enterprise reporting with the sophisticated set of integration technologies coming out of its iWay Software division.

Customers should take advantage of these choices by assessing which approach and direction best fits the way they want to centralize and distribute their enterprise reporting systems.

Embedding BI and analytics. While the movement toward standalone and strategic BI providers continues to advance, many organizations are trying to embed BI and analytics within their customer environments. Application development teams are a case in point as embedding BI within their application server environments makes it easier to improve applications' value and impact. Newer providers such as Panscopic and Viador have stepped up to the table to provide BI technology that can be leveraged within J2EE application servers from BEA and IBM.

The very nature of supporting predictive analytics and capabilities within these application areas has spawned a new class of technologies that reaches beyond the larger statistical and analytic environments. KXEN and InfoCentricity are a couple of interesting standouts. They provide simple but sophisticated environments for leveraging predictive models within specific business process areas.

Falling Behind

The database and ERP providers are still failing to use BI as a competitive differentiation for their products and customers. One minor standout is IBM, which seems to be always changing its partner strategy and approach across software and hardware groups, including data management. Its recent acquisition of AlphaBlox to provide BI on top of DB2 is a step in the right direction, but this move's impact across IBM's groups is still unclear. Many organizations are continuing to see other vendors with a much larger and more strategic view of BI for their enterprises.

ERP vendors SAP, PeopleSoft, and Oracle continue down individual paths that have yet to materialize any significant revenue or momentum — let alone direction — for their customers. SAP's admittedly larger BI solution is shorted by the company in favor of programs such as SAP NetWeaver and X-Apps, leaving many customers unnecessarily handicapped in their attempts to leverage their many R/3 deployments. Other enterprise application providers such as PeopleSoft and Oracle lack a clearly defined strategic enterprise BI view.


Many great things are happening in the BI market. The next year will bring a renewed focus to advancing BI architectures and further integration into products such as Microsoft Office. BI will begin to make great strides in line-of-business operations, further increasing the value and impact of this software segment. As big vendors get bigger, smaller vendors such as Corporate Radar, Vanguard Solutions Group, and others will begin to address not only the midmarket but also divisions within larger organizations.

Every approach has its pros and cons: The wisest course is to continuously reevaluate your knowledge and investments to ensure they add value to your business. Performance management will continue to help organizations make smarter and safer BI investments by ensuring their alignment with business requirements.

Mark Smith is the CEO and senior vice president of research at Ventana Research, an advisory services and research firm providing insight and education on best practices and technology in performance management.


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