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September 20, 2007
BI vendor consolidation: the kiss of death?
For as long as I can remember, the market for Business Intelligence tools has been more or less stable. Sure, sometimes a new player entered or another disappeared. But on the whole, the market was dominated by a couple of vendors. The most exiting news came from new versions, upgrades or a technological breakthroughs. To put it bluntly: you could choose either Cognos or BusinessObjects or if you were running SAP you could go with BW. Than things slowly started changing. Instead of Business Intelligence we suddenly found ourselves talking about things like Corporate Performance Management, financial consolidation, budgeting, planning, dashboards and scorecards. And we embraced the tools that came with it. Our work was no longer limited to reporting and analysis. We were proud that after so many years finally the strategic value of Business Intelligence was recognized. Thus changing the playing field completely. The focus in BI was shifting from a technical toward a business solution.
The BI and platform vendors quickly recognized this also and have been embracing these tools as well. They bought up companies that had tools specializing in this specific area and integrated them as best as they could in their own product portfolio. SAP for example acquired Outlooksoft (Consolidation) and Pilot Software (Strategy Management). Oracle acquired Hyperion (after they bought Peoplesoft and Siebel) the market leader in planning, budgeting and financial consolidation. Microsoft acquired ProClarity (Analytics) and made a firm entry to the BI/CPM marketplace when they launched their Performance Point Server. Cognos a pure BI player acquired Adaytum and Frango and created a complete CPM solution. Finally BusinessObjects- still busy with integrating Crystal bought Cartesis (consolidation) to complete their CPM offering that they already started building on when they acquired SRC and ALG Software. However is this buying up this consolidation not the kiss of death? Where is this going to end? Why this focus on applications rather than information?
Business Intelligence has come a long way. It is now closer tied with the business processes as ever before making the basic data (quality) that comes from this also more and more important. BI still can be an aggregated report of last month sales on a highly accumulated level but it can also be operational dashboards monitoring key business processes on a real time level supporting split second decisions. This makes a strong case for the platform vendors. They have the applications to support the business processes, capture the data and report on them. An integration of software and hardware therefore seems to be unavoidable. Cognos is one of the fist BI pure players to understand this. Their launch of Cognos Now! which integrates a hardware server and dashboard for realtime monitoring is proof of that. They might well be the first BI platform vendor.
But basically all BI/CPM vendors have more or less the same products and use the same technology. Even the corporate take over strategies are being copied resulting into a concentration of BI vendors. The real innovation still has to come from small companies that specialize in a niche of business intelligence such as: strategy implementation, meta- and masterdata, advanced visualization, text mining, search and business activity monitoring. These small companies will probably at some point in time be bought by one of the large BI vendors. After all, Cognos Now! was Celquest before. The real challenge for the large BI vendors will than be the technical integration of all these tools. It is easy to make a Ms Powerpoint presentation of where this new application fits in your product portfolio but making it work with these other tools is a far more difficult thing to do.
Finally, will we end up with one or two BI vendors with a standard set of Business Intelligence tools? No, I dont think so. The BI tool set will always be dynamic. Remember? After DDS (Decision Support Sytems) and EIS (Executive Information Systems) came Enterprise Reporting and OLAP (Analytics). Than came the consolidation, planning, dashboard and scorecarding tools. Nowadays, the streaming servers and realtime monitoring tools are being wheeled into the business. There will always be something new. The platform vendors will take a dominant position in the BI market but there will always be room for vendors with a focus on BI only. It is almost like the Olympics. Sometimes you need the decathlete to jump, run and throw the javelin and sometimes you just need a 100 meter specialist.
But I am not sure that the real innovation will come from these companies, though they may well acquire the innovators to embed them into their enterprise solutions. Like a thousand points of light, there are individuals and small companies out there already thinking in a really innovative manner about what Business Intelligence could be given new capabilities and technologies.
Who are they? I cant wait to find out! Let me know what you have seen or are thinking, and that also means the big players too.
Posted by Jorgen Heizenberg at September 20, 2007 8:30 AM
