This is the third year I've spent the majority of my time gazing into a crystal ball attempting to discern the future of the business intelligence/data warehousing (BI/DW) market. Having just completed the largest and most extensive study of that market done to date, Database Solutions III, I am happy to report that the market is alive and well. In fact, we are now projecting that the business intelligence market will be roughly $150 billion in 2003. It is hardly any wonder that practically every company with IT in its middle name is trying to tear off a piece of the action.
However, only eight companies control about two-thirds of the action. IBM is the market leader by a wide margin and is the only company that does a significant amount of business in every facet of BI. HP, Sun, Compaq and NCR are also in the top eight, deriving most of their revenues from hardware. Oracle and SAS Institute are big software players, and Arthur Andersen/Andersen Consulting is the largest service provider.
We divvy the market up into five chunks: systems, storage, packaged software, services and in-house expenditures, the latter being a significant opportunity for services and software companies. Aside from in-house expenditures, what would you guess is the biggest chunk? If you said storage, you'd win the Kewpie doll. The cost of storage is the fastest growing expense item. By 2003, we project that storage is going to take 25 percent of every buck spent for a BI solution. One reason that storage is growing so fast is the obvious one: rapid growth in the amount of data people want to have in their warehouses. Another reason is that BI applications are becoming more mission critical, so users have to invest in data mirroring, backup, archiving and all that mundane stuff most hate to deal with but can't live without.
Although UNIX is still the server platform of choice for most BI/DW users, Windows NT is gaining momentum. Many users are waiting impatiently for the debut of Windows 2000, which they believe will offer the stability and robustness that is needed to support their solutions. If Windows 2000 lives up to its promise, it will rapidly become a major BI platform, not only for small enterprises where one might think it would be popular, but also for large multibillion dollar enterprises which appear to be as interested as anyone else in saving money these days.
In fact, Microsoft appears to have garnered mind share among BI/DW users. That is indeed surprising, given the company's limited presence in the market to date. Measured by mind share (popularity poll), Microsoft came in a close third behind Oracle and Cognos in the software vendor category. IBM, which has substantially larger software sales in the BI space than Microsoft, came in fourth.
Increasing numbers of users are getting interested in buying end-to-end solutions, not so much to save money but to get their applications deployed faster than the do-it- yourself variety. Last year we found a lot of skepticism about packaged solutions. This year, that skepticism has diminished. About half the users in our survey said that they would at least consider buying a packaged solution.
All good news, you folks out there in Userville might well say a growing market, more competition, lower prices, rainbows on the horizon. More bang for the buck, as the saying goes. Like most things in life, though, bad news accompanies the good. The fact is that you are likely to be spending about three times as much for your BI solutions in three years as you are today. This apparent dichotomy stems from the more syndrome more applications, more data and more users. For example, setting aside mass access applications, our study found that the number of end users in the knowledge worker or decision-maker categories is likely to increase by a factor of four over the next three years. On top of that, most enterprises will have at least a few mass-communication applications where employees, customers, suppliers and even plain old Web surfers may be given warehouse access.
When you add it all up, BI/DW translates directly to job security for just about anyone involved with it, whether you work for a vendor or a user. Time to ask the boss for a raise, more stock options or a paid sabbatical.
Readers interested in learning more results from the study are welcome to tap into the free stuff at http://www.survey.com/bidw/.
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