BI booms as firms strive for more accurate data

Senior research analyst at Gartner Dan Sommer said this growth is partly down to consolidation in the industry as big vendors have focused on promoting the business intelligence technology they've acquired to their existing customers.

SAP came out as the top BI company in terms of revenue during 2008, with a 24% share of the market following its acquisition of Business Objects the previous year. As a result, the firm saw its revenues from BI rise to $2bn. SAS Institute and Oracle tied for second place, each with 14.6 % of the market, followed by IBM/Cognos with 11.3 %. Microsoft came in with 7.7 % and MicroStrategy 3.2 %.

BI comes into its own during the recession as the technology can help inform critical business decisions with more accurate data as well as the current market receiving a boost from consolidation among suppliers. The six leading companies held 75% of the market. “Industry consolidation has led to an increase in growth, despite the necessary product rationalisations and organisational changes,” said Sommer. “The large stack vendors, especially the application vendors, have put a lot of focus and sales power behind their newly acquired BI products, with accelerated migrations and upgrades in the installed base as a result.”

He added that growth has been geared towards the top end of the market. “Most, but not all of the mid-tier independent BI vendors targeting the enterprise struggled more, which indicates that there is bifurcation in buying to either more stack-centric behavior or smaller tactical departmental projects,” he said.

But the uptick is not expected to last into next year, according Somner. Already there is a slowdown among suppliers in the mid range market. “In tough times, the first step is to increase transparency which helps identify cost-centres and then to more tightly align strategy with execution. This is why demand for BI, analytics and performance management is relatively strong even in a bearish economy,” he said. “However, we don’t expect these two markets to sustain the same high growth rate in 2009, as much of it came from the lowest-hanging fruit in up-selling products of an acquired company to an existing installed base, and because the first half of 2009 was softer due to the recession.”

Pure-play vendor SAS Institute reported perhaps the strongest growth. The privately held company reported to Gartner that it had $1.29bn in revenue in 2008, compared with the $752 million it reported for 2007. A second piece of research from IDC found that SAS is the “overwhelming leader in advanced analytics" with a 33% market share, more than twice the sales of the next closest supplier and more than the next 16 vendors on the list combined. SAS was number two in the overall BI tools market and among the top five suppliers of query, reporting and analysis tools segment.

“For the last three years in the BI tools market, the advanced analytics segment grew faster than the query, reporting and analysis segment,” said Dan Vesset, IDC programme vice president for business analytics research and co-author of the report. “We believe that this trend will continue even as economic conditions remain a challenge.”