Which industries require business intelligence software
Interest in software and services for business intelligence will continue to grow in 2008. This is not only supported by the growth forecasts for the overall market, but also by the high priority that companies give BI. At this year's BI Summit in Amsterdam, the Gartner analysts presented a global survey of IT managers, according to which, as in the previous two years, BI enjoyed the highest priority among the technologies used. And the augurs also benefit from this development: with officially over 1000 participants from 39 countries, the summit achieved a record attendance.
Key figures that the CEO doesn't need
Nevertheless, there can be no talk of vain sunshine. Rather, as in previous years, the analysts took the users to court. "In most companies, BI solutions are only used for reporting key figures, but not as a basis for strategic decisions," complained Andreas Bitterer, Research Vice President at Gartner. Even after many years of use, BI is still too "bottom-up" -driven, which means that the questions and metrics are often not those that interested board members and management. (see also "Gartner: BI needs a master plan")
"Many BI projects are uncontrolled (without governance) or not geared towards corporate interests." This was also shown by a recent survey of company representatives on the goals of their BI initiatives. According to this, 71 percent of those questioned were only able to describe their motives in general with the wish for "faster decisions". Just as vaguely, 45 percent replied (multiple answers were possible) that current data is needed. Only in third place came the statement that one wanted to use BI to try to harmonize the economic corporate goals and the ongoing business. According to the market researchers, however, this should be the high art of BI. Above all, it is not a strategy to see BI only as a means to save costs.
The potential of BI software is not used
Most current BI initiatives among users are, according to Gartner, of a purely tactical nature or aim at "focused solutions". They are department-related, arise from a series of individual projects and are operated by selected users. The most advanced initiatives include staff units for project management and the formulation of corporate standards, which Gartner has been calling for as a Business Intelligence Competence Center (BICC) for several years.
Overall, however, almost all companies lack a clear strategy and a systematic approach to BI.
As a result, a large part of the potential of corresponding products for corporate management and the development of competitive advantages is lost, so the tenor of the event. According to the analysts, the products have developed in such a way that they should no longer be a reason for failed BI projects. This applies in particular to those for corporate performance management. After BI manufacturers were previously criticized for their proprietary products, often insufficiently integrated tools, there is now a completely different problem: They have become functionally too powerful and overwhelm many users. "BI is too difficult for 80 percent of users. They don't even know what to ask with such products," said Gartner analyst Bitterer (see also "Business Intelligence: What Companies Really Need").
The formulation of BI strategies and product selection are made more difficult by the constant takeovers in the lucrative market. Gartner predicted a few weeks ago that the four "mega vendors" SAP, IBM, Oracle and Microsoft that had emerged would be able to account for around 70 percent of BI sales by 2012. Last year, they expanded their market position by taking over the leading BI manufacturers Hyperion (by Oracle), Business Objects (by SAP) and Cognos (by IBM) as well as through further acquisitions and in-house developments (e.g. the Microsoft Perfomancepoint Server).
BI stack instead of BI platform
This also changes the thrust of the product strategy. If up to now the main focus in the BI warehouse was a battle for the best BI platform, i.e. the infrastructure for setting up and operating reporting and analysis applications, the focus is now on the "BI stack". This includes all components, from data management and analysis to the front end and analytical applications and is also based on other infrastructure such as database, ERP software and integration servers from the same provider. The big manufacturers will try to bind users more closely to themselves in the form of one-stop shopping, the analysts sum up. However, no one has yet been able to fully meet this requirement and must also take into account the preferences and existing installations at companies: "Nobody can rule out competition", says Bitterer (see also "2007: Business Intelligence and Performance Management come together").
Beware of decoy offers
In the future, users will have to weigh up how close their relationship with these giants should be. It is currently financially worthwhile to get everything from one provider, as this offers huge discounts of up to 50 percent, according to Amsterdam. On the other hand, just looking at the price and "selling your soul" can be risky. There is a risk of acquiring more licenses and products than required and thus accumulating "shelfware" (an old problem in the BI market) and having running costs due to rising maintenance fees. Furthermore, there is a lock-in in the product world and cycles of the providers, which one can hardly escape. In addition, according to Gartner, it must be assumed that some providers will initially be more preoccupied with integrating their products than worrying about innovations. In principle, it also applies that the products cannot ensure success with BI. A clear BI strategy and governance, the ongoing maintenance of systems and data models, the improvement and assurance of data quality, training courses and a user-friendly work environment are the key to this.
This situation could be an opportunity for the many remaining BI specialists and newcomers to the market. Many of them are now trying to integrate their products into the customer's IT landscape more easily and more specifically through mechanisms such as web services and service-oriented architectures. With previous techniques for query and reporting and processes such as online analytical processing (OLAP) alone, however, it is difficult to achieve a competitive advantage because the mega-vendors can provide corresponding standard functions and products. Rather, BI specialists have to point out further areas of application and techniques for data analysis and processing in order to be able to hold their own against the generalists.
Score with innovations
According to Gartner, dashboards, predictive modeling, BI combined with company search, interactive visualization techniques, memory-based data analysis and BI appliances are of interest. Also new is the rental of BI software (Software as a Service), which, in addition to established manufacturers such as Business Objects and Cognos, also offers newcomers such as LucidEra. Furthermore, special offers for medium-sized companies, the OEM business (Original Equipment Manufacturers) with smaller manufacturers of business software and industry solutions developed by value-added resellers could open up additional sales opportunities for BI specialists. There are currently many exciting niche providers that companies should evaluate. Gartner specifically named the German provider Panoratio, as well as the manufacturers Fractal Edge, Seatab, Endeca, Oco, 1010Data, Greenplum, illuminate and Advizor Solutions. However, it is quite possible that these could find themselves under the roof of a new owner as their success grows.
Are there any more mega vendors coming?
It is also not clear that the four heavyweights in the BI market will remain, according to Bitterer. He could well imagine that new challengers could arise among the remaining BI specialists through alliances and takeovers. A simulation game for him would be a BI stack from Teradata, Informatica and SAS Institute or Hewlett-Packard, Informatica and Qliktech. Sun Microsystems, MySQL and Jaspersoft could offer an open source alternative. In addition, the BI market could attract other prominent manufacturers such as EMC, Software AG, Adobe or Cisco. "Imagine that Apple, which has solved the issue of usability like no other manufacturer, would bring out a BI client, or Google would distribute free web BI tools."
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