Dave Kasabian's Pervasive Performance Management Blog: Business Intelligence: Revolutionary to Commodity and Back in Less Than 4 Years

Pervasive Performance Group Blogging on BI and Performance Management Practices

Business Intelligence: Revolutionary to Commodity and Back in Less Than 4 Years

The End of the Revolution

Back in 2008 I was a Research Director at AMR Research covering BI and Performance Management. After a stimulating period of new innovations in the space, many of the niche vendors (like Celquest, Brio, Crystal Decisions, nSite and many oth

ers) were gobbled up by the big BI vendors Hyperion, Business Objects, and Cognos who were then acquired by megavendors Oracle, SAP, and IBM respectively.

Circling the Wagons

Almost instantly inquires changed from questions about innovative vendors and technologies to "We have Business Objects but we're not an SAP shop, what should we do?" or "Should I consolidate all of my BI to a single vendor?" or "What does this mean for product roadmaps and integration?"

The End of the Innovation Era?

The word innovation dropped off inquiry calls like a rock off a cliff. Many analysts touted this as the commoditization of BI and that price and vendor preference would soon be the major deciding factors in BI platform decisions. It looked like BI was destined to be the 2nd coming of ERP (necessary, even vital, ...but not very exciting).

BI is Born Again

The Mega Vendors are Making Hay

Fast forward 3 years: SAP, Oracle, IBM, and MIcrosoft still dominate the market with almost 60% market share according to Gartner (52% if you remove CPM suites from the numbers). But that share has remained virtually unchanged since 2008 with each vendor moving up or down a point or two each year..

A Big Pie to Divide

But the market is now over $10B which means non "big 4" vendors made around $4B in this market in 2010. The Gartner Magic Quadrant for BI Platforms has 20 vendors of which only SAS has revenue over $1B (excluding the big 4) and only three others have revenues over $200M in BI revenue. There are probably another 50 plus niche BI vendors that may never show up on the Magic Quadrant that are delivering innovation to the market.

Innovation is Back

New and innovative technologies and delivery methods are changing the way we think about BI. More BI is being purchased by the business rather than IT allowing the niche vendors to skirt around enterprise standards and grab a department here or a division there within an "Oracle shop" or an "SAP shop". And while the mega's might find that a nuisance, their revenue continues to grow and market share remains stable in a growing market. There is a lot of room in this market for the mega vendors to continue to gorge themselves while the niche vendors live off the scraps and teach themselves to hunt. Technology has given them the tools with which to hunt effectively. Cloud, Open Source, Search, Collaboration, In-memory, Mobile, Social, Predictive, and Big Data are all areas where innovation and differentiation opportunities exist.

Ride the Wave

The next three years are going to be a great time to be an analyst, vendor or consumer of BI. Advancements in cloud, mobile, social, search, and collaboration will take BI places we would not have expected only a few years ago. But like all waves it will eventually hit the beach and another market consolidation will happen. But until then, ride the wave!