Despite difficult economic times, the business intelligence (BI) market continues to grow. According to Gartner’s recently published Magic Quadrant for BI, while the market will grow at a compound rate of 8.1% annually until 2015, because the number of different things that enterprises are looking for BI solutions to do is also growing, vendors are struggling.
Gartner’s BI Magic Quadrant
Over the course of 2011, those extended needs saw considerably more business influence on enterprise decisions in relation to BI, forcing IT departments to invest not only in straight BI, but also in products in addition to, or as an alternative to, traditional BI tools -- a good example being data discovery products -- as new content types and models emerge.
Meeting this challenge, Gartner says, will be one of the major challenges for vendors playing in the BI space over the coming year.
Interestingly, though, this Magic Quadrant -- unlike the Magic Quadrant for other software products -- with the exception of two companies that fall into the Challenger quadrant, only lists companies that fall into the Leaders quadrant and the Niche Players quadrant.
We will look at why this has happened in the second part of this two-part feature, which will appear in the coming days, as well as the companies that made it into the Leaders quadrant, including IBM, Microsoft and Oracle.
BI Platform Capabilities
Before starting, it is important to understand what we understand to be a business intelligence platform. According to Gartner, Business intelligence (BI) platforms enable all types of users -- from IT staff to consultants to business users -- to build applications that help organizations learn about and understand their business.
There are fourteen capabilities divided into three categories: Integration, information delivery and analysis. For enterprises looking for BI and a practical checklist, those capabilities include:
- BI infrastructure: All tools in the platform should use the same security, metadata, administration, portal integration, object model and query engine,
- Metadata management: It should be easy to capture, search, reuse and publish metadata.
- Development tools: It should contain a development and a software developer's kit for creating BI applications.
- Collaboration: There should be the capability for BI users to share and discuss information, BI content and results, and/or manage hierarchies.
- Reporting: BI platform vendors should be able to provide a wide range of reporting styles.
- Dashboards: It should provide the ability to publish formal, Web-based or mobile reports with intuitive interactive displays of information.
- Microsoft: It is vital that the BI vendor provides integration with Microsoft Office, where Office acts as the BI client.
- Search-based BI: A search index to both structured and unstructured data sources is required.
- Mobile BI: This enables organizations to deliver report and dashboard content to mobile devices.
- Online analytical processing (OLAP): This enables organizations to analyze data with extremely fast query performance,
- Interactive visualization: This displays numerous aspects of the data using interactive pictures and charts.
- Predictive modeling and data mining is also included.
- Scorecards: These are metrics displayed in a dashboard that aligns key performance indicators (KPIs) with a strategic objective.
Magic Quadrant Leaders, Niche Players
Even with all this, it is not easy to be included in the Quadrant. To achieve this, vendors need to generate US$ 15 million in BI-related software license revenue annually. Vendors were judged on their ability to turn concept and vision into a market reality.
Leaders are vendors that can implement enterprise-wide implementations that support a broad BI strategy and have the operational capabilities to deliver on a global scale.
These are players that do well in a specific segment of the BI platform market or that have limited capability to innovate or outperform other vendors. While in general they have a single, strong component, they lack the breadth in other functionality areas. As a result, they will also have a limited customer base.
BI Market Trends
We have already seen that despite tough economic conditions, the market is predicted to grow until 2015. With pressure on enterprise budgets, vendors are expected to provide BI platforms that are increasingly agile and provide smarter and more actionable business information.
Citing its own survey of CIOs in enterprises for 2011, Gartner says analytics and business intelligence is once again a top priority for 2012, a position it has held for three of the past five years.
That said, however, slow economic growth, increasingly viable low-cost alternatives and consolidation are expected to keep BI platform growth in the single-digit range in 2012 and beyond.
Demand for BI increased not just across the enterprise, but the number of groups of people that are looking to use it are increasing too.
For every user type, there are associated user cases, which have brought not just a huge variety of functions, but also an increasing demand for new functionality.
Vendors, as a result, are being forced to provide capabilities that are beyond the traditional demands of query, reporting and analysis associated with BI platforms. These new demands are often conflicted around budget, people, skills, technology and management.
Vendors, then, are being forced to provide for many different enterprise interests. However, this is not a temporary sea-change forced by economics and budgets; this is a trend that is here to say and will result in considerable change in the market over the coming year. Gartner has identified six trends:
1. Business vs. IT
This is a trend that was evident last year and focuses around business demands for easy-to-use, flexible products that puts analytics into the hands of business users. This is in contrast to IT demands for the maintenance of standards and the creation of supportable BI environments with predictable performance and quality, usable data. Those enterprises that participated in the Magic Quardant survey identified the following issues:
- Business users are more willing to find products that suit the use case(s) at hand; IT wants to leverage a standard platform as broadly as it can
- License cost is a big concern for IT, less so for business users
- Integration within the BI platform is important for IT, but much less so for business users
- Functionality limitations are a sensitive area for IT, less so for business users
- Business users are far more open to SaaS/cloud products; IT is far less likely to entertain SaaS/cloud analytics as a potential option.
2. Data Discovery Momentum
Data discovery alternatives to enterprise BI platforms offer highly interactive and graphical user interfaces. According to Gartner, the trend to invest in these tools started in 2010 and has been one of the biggest growth areas in BI since.
This growth has become so pronounced that it is possible to divide the BI market into the Data Discovery segment and the Enterprise BI segment.
Gartner also says that despite the risk of creating fragmented silos of data, definitions and tools, users are finding data discovery tools so compelling that they continue to invest, forcing IT to back away from a single-minded pursuit of standardization on one vendor to a more pragmatic portfolio approach.
3. Impact of Mobile BI
The ongoing development of mobile devices has solved many of the problems associated with using BI on mobile devices -- so much so that by 2013, 33% of BI functionality will be consumed on mobile devices, with more than 20% of those surveyed for the Quadrant indicating that they already have mobile BI. Use cases are heavily skewed toward executive and management support using mobile.
Buyers are starting to look for mobile interfaces into core BI functionality as advanced mobile capabilities such as location awareness and native gesture support influence the types of applications being developed.
4. Decision Support
Enterprises are once again focused on providing support for better business deicison making. For a long time, enterprises were fixated on how BI platforms worked, rather than on what they were supposed to do. The result was that many companies lost sight of the end result, which was, and still is, decisionmaking support. That situation has changed again, and the focus for enterprises is back on BI platform support for decisionmaking.
5. New Use Cases and Content Types
More than half of all respondents indicated that finance, sales and operations analysis were implemented within their organizations. Other common application areas including marketing, supply chain and customer service, risk management, social media, quality management are also beginning to appear.
As enterprise users are demanding new use areas, vendors are being obliged to provide:
- Real-time data access, including hybrid content analysis, or combined structured and unstructured data analysis
- Analytic applications
- Geographic-intelligent functions
6. Removing Complexity
BI and analytic environments are often described as difficult to implement, maintain, develop, and use. Layers of analytic sophistication are being simplified so they can be consumed by business users, not just analytic experts.
Cloud services may also play an important role in removing complexity from the equation. While only 30% of respondents indicated that they were using or planning to use cloud-based offerings for business analytics, the number is growing. In Part 2 we will look at how those that made the Leaders Quadrant are dealing with these issues.