Gartner's annual London business intelligence summit wrapped up last week with predictions for a continuing healthy market in European markets and some shifts beginning to appear in the vendor landscape. The market research and consulting firm sees the largest two or three vendors dominating growth going forward, pure-play revenues flattening and a still vibrant market for upstart smaller competitors.Not unexpectedly, European BI markets and customer behavior are taking a similar path to that found in the U.S. More enterprises are taking a strategic approach to business intelligence, though projects, tools and ownership still proliferate as they do in the U.S. Drivers are consumerization of information, standardization, modularization and collaboration. Inhibitors are a lack of skills, stability, sponsorship and continued dependence on spreadsheets.
Gartner Research VP Andreas Bitterer tells BI Review that training and education are top priorities for end users and for vendors. "In the end-user company there is a gap between what IT departments are talking about in terms of tools, reporting, dashboards and ETL, while the end user is not in a position to articulate their requirements for access to data. There needs to be some education in terms of the end user being told how to ask and what is actually possible." On the vendor side, sellers of software, hardware and services are trying to find new buying centers in the end user organization as an end around to the typical IT department engagement. The goal is to reach business owners in finance, sales, marketing and address them directly. "They fall into the same trap as IT, they keep talking technology and don't seem to strike the right nerve with the non-IT savvy end user. They're not doing a good job of describing what all these dashboards and tools do in the context of the business."
Money is not the problem, Bitterer says. For the second straight year, BI spending tops the priorities articulated in Gartner's CIO survey. "There has always been a budget for BI, maybe IT was just sitting on it, but usually there are many different small budgets leading to a proliferation of vendors, metrics, definitions which hurts them in the end because you [end up with] five answers to the same question."
This has made standardization a priority for enterprises, and accounts for the coming dominance of so-called "mega vendors" Microsoft, Oracle and SAP. While these companies presently hold just 22 percent of the market, they account for 54 percent of market growth in EMEA. By contrast, pure plays including Cognos, Hyperion and Information Builders hold 64 percent of the market but were growing at just 7 percent according to figures that are already more than a year old. "Upstarts" including QlikTech, arcplan, Applix and Spotfire hold just 4 percent market share but 25 percent growth.
"Of all companies I'd say the highest growth in terms of deployment and interest is Microsoft," says Bitterer. "They're starting to push with SQL Server, PerformancePoint [Server], Excel Services, all combined with the Office suite and the database." Gartner says Microsoft will present an opportunity for smaller and mid-sized companies, and while there are enterprise projects running on SQL, there are still issues of scale to be addressed. "We have seen organizations that have 30 terabytes in SQL server; if you would add another zero to that you'd get into the high end of the market where you're used to seeing IBM and Teradata. So yes, there are large companies like Fidelity and Barnes & Noble running big instances of SQL, though there are relative limits."
The compelling case for the largest vendors though lies in the enterprise strategies toward consolidation and standardization. Further, the same very large vendors are meshing analytical applications with processes served by enterprise applications and transactional systems, Bitterer says, in a way making processes - rather than end users - direct consumers of BI. "It's not only an end user who looks at a report and decides what to do next, operational and transactional applications with analytical components are becoming a part of the workflow." Examples of this strategy are already-existing applications for campaign management or supply chain optimization, though these remain isolated pockets not knitted into a strategic solution. Bitterer thinks the conventional end-user driven and process-driven BI worlds aren't merging, but prefers to take a global view of applications in the two different contexts. "That's the whole idea of analytics. Though it's a loaded term and there are different definitions of what analytics means, the idea is to have analytics as a particular functional process that is leveraging BI and performance management applications under the covers to make the process more intelligent."
Overall, Gartner believes business intelligence platform revenue will grow 10 percent in the Europe, Middle East and Africa region to 1.5 billion euros in 2007.
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