Over the past 12 months, there has been a lot of movement in the business intelligence market from both established vendors and new entrants, making it difficult to distinguish old trends and future possibilities.

Gartner, however, has released its Magic Quadrant for Business Intelligence, in which a number of themes have become a lot clearer. Over the coming years, Gartner said, ease-of-use, complexity of analysis, scale and performance, and total cost of ownership will continue to dominate BI market requirements.

What is Business Intelligence?

Just to be clear about what it is we are talking about, BI platforms enable users to build applications that help organizations learn and understand their business. Gartner (news, site) defines a BI platform as a software platform that delivers groups of capabilities that fall into three principal functionality categories: Integration, information delivery and analysis.

While information delivery is currently the core focus of most BI projects, increasingly there is an interest in analysis deployments to discover insights.

Considerations about deployments will revolve around ease of use, complexity of analysis, scale and performance, while the ability to bridge widely proliferating departmental silos with enterprise deployments will be a critical IT and BI vendor challenge.

Market Overview

The demand side of the BI platform market in 2010 was defined by polarization between business users' need for ease-of-use and flexibility on the one hand, and IT's need for standards and control on the other.

The principal buying criterion is now ease-of-use rather than functionality, with business users increasingly driving BI purchasing decisions.

Another feature of last year’s market is that, even though many customers were dissatisfied with the products sold to them by megavendors, those companies still control the market and market revenues.

Market Drivers

There are five principal factors driving the market. These are:

  • Demands for data discovery platforms have underlined the need for vendors to provide a portfolio of products rather than a single product. While IT is looking for stack-centricity, business users are looking for innovative, data discovery tool vendors.
  • Vendors are finally coming around to providing for business users rather than dictating what business users will use.
  • Acquisition malaise is now common. The transition process typically takes a considerable amount of time that is characterized by customer dissatisfaction and product concerns.
  • While reporting and ad-hoc analysis is still the dominant form of BI, it is less extensively used than in 2009, and there is a shift toward analysis and forecasting.
  • Unsurprisingly, cost is an increasingly important driver even though BI spending grew in 2010. Organizations showed increased willingness to consider low-cost options and alternative deployment models such as SaaS.

In addition, three further characteristics on the demand side continued to expand and drive BI growth. These are:

1. Consumerization of BI

  • Intuitive, fun interfaces: BI business users are demanding the same experience from their BI tools that they get with personal tools.
  • Mobile: The need for more intuitive and interactive BI tools and applications for users on the go.
  • Business user data mashups: Business user data mashup capabilities accelerate the analytic process and will also extend BI platform use.

2. Extreme Data Performance

  • In-memory: In-memory technology must be coupled with consumer-oriented BI tools
  • Extreme volumes: BI platforms and analytic applications will evolve to support the analysis of the vast amounts of an increasingly diverse and complex data
  • Social and content analytics: Social filtering, social-network analysis and sentiment analysis.

3. BI as a Decision Platform

  • BI embedded in the business process: Most BI applications today are disconnected from the business process and the decisions they support.
  • Unifying BI with planning, simulation, forecasting and prediction
  • Collaborative decision making

Quadrant Leaders

To even get into the MQ, vendors must generate at least US$ 15 million in BI-related software license revenue annually, and show that their BI platform is used routinely by organizations. Leaders are vendors that are reasonably strong in the breadth and depth of their BI platform capabilities and can deliver on enterprise-wide implementations.