While Gartner (news, site) has estimated that the global business intelligence (BI) market continued to grow at rates considerably higher than other areas of IT last year, research from LogiXML, which produces web-based BI product, shows that many companies and users are far from happy with the performance of the products they are using.

Business Intelligence 2010

In the run-up to Gartner’s business intelligence summit next month, the company says that the market value of BI has reached US$ 10.5 billion, up by 13.4% over 2009. And while the LogiXML research shows that most users are finding current offerings difficult to use and install, the leaders table for those with the biggest share of the market remains unchanged.

From that, it may be possible two draw two different conclusions:

  • Despite user difficulties, most enterprises are either using what they have already and have not changed their software, or they keep returning to the same vendor.
  • Given the large number of smaller players that are entering, or already established, in the market, enterprises are not really looking at changing vendors.

However, these are speculative, whereas overall market growth in the BI space is confirmed by the findings of Gartner’s Market Share Analysis: Business Intelligence, Analytics and Performance Management Software, Worldwide, 2010, report.

In 2010, the global resurgence from stimulus packages, general improvement in the macroeconomy, and new product releases contributed to a surge in BI software spending,” said Dan Sommer, principal research analyst at Gartner.

It is clear, he says, that BI is at the heart of information-driven initiatives in the market. As a result, “vendors aggressively market their capabilities in this area, so revenue growth is as much a function of vendor push as a demand pull.”

Market Leaders

In this respect, it is noteworthy that the four major players continue to dominate the market and to consolidate their position by acquisitions, or product development.

Additionally, with the economic environment difficult over the past couple of years, many companies continued to focus on their day-to-day projects, so upgrades to existing, high-maintenance packages took precedent over everything else.

A final effect was that tactical buying for specific business goals took precedence, forcing vendors to focus on smaller deals, to the benefit of open-source sales and data-discovery vendors.

‘Dissatisfied’ BI Consumers

Despite this, LogiXML found that large numbers of enterprises were "dissatisfied" with their business intelligence products and vendors

Within IT departments, there is ongoing consolidation of BI tools at the same time individual enterprise departments are using a new wave of data discovery tools that have a much lighter footprint and come from assorted vendors.

Could it be that individual departments are responding to their dissatisfaction with their established vendors and slowly bringing in tools that work better for them?

Whether they do or don’t remains to be seen over the course of this year, but many will be increasing their spending on BI, even if they don’t appear to be willing to spend on the IT resources that will give them the most from their BI deployments.

Traditional of Agile BI?

According to the research by LogiXML, which surveyed 575 people across several industries about the BI experience, dissatisfaction with existing deployments is widespread.

While this should present an opportunity for vendors, worth noting here is that 68% of non-technical respondents were dissatisfied or indifferent with the responsiveness and support of their current BI vendor, and 53% of technical respondents felt the same.

A lack of IT resources combined with products that were technically challenging was cited by 42% of the respondents as the greatest obstacle to deployments, with the majority of those that don’t have embedded BI citing this as the reason why not, while 27% said they were just too expensive.

The findings we’ve compiled suggest that the overall need for BI continues to grow, but that companies are bogged down by traditional BI approaches that contain complex and costly platforms and data manipulation or tool sets with long development cycles -- all of which require significant IT involvement,” said Brett Jackson, CEO, LogiXML.

The result, he says, is that companies that continue to use cumbersome platforms and refuse to make the move to more agile BI will, in the end, pay more for technology that is underused. Other problems included:

  • Limited capabilities (26%)
  • Difficulties accessing data (25%)
  • Overly long deployment/development cycles (25%)

And factors governing BI choice

  • BI functionality (27%)
  • Cost (27%)
  • Agility (23%)

It will be interesting to see how this pans out over the course of this year. In Gartner’s Business Intelligence Magic Quadrant in February, it noted that the principal buying criterion is now ease-of-use rather than functionality, with business users increasingly driving BI purchasing decisions.

And while it too noted the dissatisfaction of many enterprises with the megavendors, it did suggest that for this year, at least, they would continue to dominate.

However, looking across the Magic Quadrant alone, and keeping in mind that there are many able vendors that did not make it into any of the Quadrants for one reason or another, there is the beginning of a new trend that will see smaller and more agile vendors starting make ground where larger vendors find it difficult to respond.