Software Giants to Muscle in on BI

The EMEA market for Business Intelligence (BI) platforms will grow at an annual compound growth rate of 9.7% to reach 1.9bn Euros in 2010, according to Gartner. However, the analyst warns pure play BI companies to expect a strong challenge from software's 'mega vendors'.

Gartner warns that the market will get tougher in 2007 with increased competition from the major software vendors including Oracle, SAP and Microsoft. BI revenue from these mega vendors will grow three times faster than that of BI pure-play vendors in 2007 (20% vs 6%), the analyst firm predicts.

VP Andreas Bitterer, speaking at the Gartner BI Summit which concludes tomorrow in London, said BI had 'become a strategic initiative' recognised by CIOs and business leaders but is not well understood among company employees, requiring an increased focus on training in 2007. Bitterer says results from Gartner's annual survey of 1400 CIOs worldwide shows that BI is 'the No.1 technology priority - for the second year running.'

Nigel Rayner, also a Gartner VP, said many companies were looking as a logical next step to bring BI 'to the masses', making tools available to more employees and to customers, business partners and suppliers. 'Companies that have invested heavily in Enterprise Resource Planning (ERP) are now realising they need to invest in BI to extract value from the massive amount of data they are storing as a result of ERP... ERP helps you do things better, but BI helps you do better things.' He cited the example of Norwegian logistics company Tollpost Globe, which went from being the worst performing company in their sector to the most profitable one in the space of four years.

Another trend highlighted by Gartner is companies' desire to reduce the number of vendors and tools deployed in their organisation, given the past tendency for each department to buy their own BI solutions, resulting in 'an explosion of different tools across the business'.

Gartner warns BI vendors that price pressures, increased competition and consolidation spell tough times ahead. In 2006 the 'mega vendors' had just over 20% of the global BI market and the firm predicts this will increase to more than 30 percent by 2010. 'The big software companies are well positioned because they have embedded BI into their platforms and they are selling into a large installed base' says VP and distinguished analyst Betsy Burton. 'They may not always represent the best solution, but they are easy to install for a company that already have their platform in place.' Microsoft will launch Excel Services this year as part of Office 2007, with associated Performancepoint Server applications that will use Excel – expected to be particularly attractive for small and medium sized businesses as an option giving reasonably priced, standard BI functionality.

Web site: www.gartner.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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