This is an article from the August 2006 issue of DM Review's Extended Edition. Click on this link for more information on DMR Extended Edition or to download this entire issue in a PDF format. Business intelligence (BI) is evolving in a way that will empower more people in an organization with tools they can use every day. What role do BI product suites play in this evolution - enabler or inhibitor? The answer depends on who you are.
In the ancient days of the PC (when some of my readers were glued to their Atari game systems, perhaps), people debated about which word processor, spreadsheet and presentation software they would buy. Back then you chose the best product, not just the one that said Microsoft on the box. In fact, Microsoft's products were not considered to have the best features. Then Microsoft decided to bundle their versions of these applications and even threw in a desktop database. In a brilliant move, they priced the package cheaper than the à la carte price of the better products. Next thing you knew, everyone was using the suite of Microsoft Word, Excel, PowerPoint and Access.
Years later, BI vendors provided best-of-breed software specializing in different BI categories: reporting, ad hoc query and online analytical processing (OLAP). Then history repeated itself as the vendors decided that they, like Microsoft, should expand their product offerings to include the full range of BI capabilities. Hence, each of the major vendors now offers a BI suite.
Great idea. Companies can go to one vendor for all of their BI needs. It improves productivity for both business users and IT. On the surface, this appears to be analogous to Microsoft's Office product bundling. There are two significant differences, however.
- Complexity: BI suites make BI implementation more complex because there are more working parts. Further complicating matters are the upgrades and transitions required because these suites were created through either acquisitions or major product introductions.
- Cost: BI suites increase the cost of implementation. The most obvious cost is licensing. If you need all the parts of a suite, it is more cost-effective than the sum of the parts. However, there are hidden costs: the resource expenses to learn how to design, develop and deploy the suite. If you don't need all the portions of the suite, you end up paying more for licensing and resources.
For whom are BI suites the right choice? They work well for large corporations with IT personnel dedicated to BI implementations and who specialize in this software. BI vendors and industry analysts all suggest BI competency centers for this very reason. Several of my clients have deployed BI suites to consolidate separate BI offerings from multiple vendors. The choice enabled their business and IT groups to be more productive when using BI tools.
Suites are a difficult choice for small and medium-sized businesses (SMBs) with less than $1 billion in sales. Quite a few firms fit in that category. Their IT staff performs many roles and cannot afford to be dedicated to anything resembling a BI competency center, which many large firms are deploying. For these firms, the cost of the BI suites in terms of licensing fees, the infrastructure to develop and deploy, and to staff are prohibitive.
Some of my SMB clients are no longer using software from the largest BI pure-play vendors. Their goal is to avoid the higher cost and complexity (in their eyes) from their previous vendors' movement to BI suites. Each client had successfully implemented a particular BI tool from one of these vendors, but as these vendors expanded into BI suites, the costs for licensing and resources became more than they were willing to pay. They felt they were paying for a lot of functionality and complexity they were not going to use. Their previous vendors may have the best products on the market in terms of feature evaluation, but the clients did not perceive the value in them.
The SMB customers' need has created a terrific opportunity for small BI vendors that specialize and make their products more cost- and resource-effective. Many BI software vendors offer BI tools for reporting, ad hoc query or OLAP (just as the major vendors used to do) and have loyal customers, but are relatively unknown - never making any industry analysts' lists. In addition, and probably more of a long-term trend, Microsoft's offerings are bundled with SQL Server 2005, and Microsoft partners are building on that SQL Server bandwagon. These small firms, along with Microsoft (who bought their former BI partner ProClarity) fit the need for SMBs.
BI is becoming pervasive; however, two different landscapes are emerging. Major vendors' BI suites are the answer for large corporations, but Microsoft and many small software vendors are seizing the opportunity to provide pervasive BI solutions to SMBs.
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