The data warehousing and business intelligence (BI) market was once the territory of a few vendors selling highly customized solutions. The computation power and storage requirements alone made the price tag of these solutions affordable primarily for big businesses. For many mid-tier and smaller businesses, the potential benefits of warehousing/BI solutions appeared to be out of reach.

More recently, large and small companies alike are able to reap the benefits of business intelligence. Many new and innovative products have appeared in the market, the cost of hardware components has dropped radically and the availability of less expensive software has increased. Small businesses are now able to take advantage of the powerful insights into business operations and strategies that warehousing/BI solutions can provide.

New Growth at the Low End

Most businesses recognize that the lack of relevant information and the ability to interpret it hinders them from optimal performance. Advances in both hardware and software have made it more practical to develop and implement smaller warehousing/BI solutions and more feasible for smaller businesses to deploy them. The results of's fourth annual comprehensive survey of the data warehousing and business intelligence market shows that many small businesses are actively developing and implementing these solutions.

The rising interest among smaller businesses is evident in the number of them now developing solutions. Nearly 78 percent of small (under 100 employees) and 68 percent of medium (100 to 999 employees) businesses, compared to 56 percent of large (1,000 or more employees) businesses, are either in the midst of planning or implementing a solution. Conversely, a little more than 20 percent of small businesses have completed or are expanding solutions compared to over 40 percent of large businesses.

Understandably, the components of solutions in smaller businesses typically consist of smaller, lower-priced products. Dell and Compaq servers are more popular choices for a hardware platform in small- and medium- sized businesses. One of Microsoft's products is more likely to be the operating system and/or the DBMS used for these solutions. These low-end favorites often see their popularity wane in bigger solutions. As illustrated in Figure 1, the use of Microsoft's SQL Server as the underlying database falls as the size of the solution grows.

Figure 1: Vendors of DBMSs Used for Warehousing/BI Solutions by Size of Useful Data

In the survey, small businesses indicated they were more receptive to new and alternative products. Forty-seven percent considered themselves visionary or a part of the leading edge when adopting new technology, and it is not surprising to find these businesses using open source products. While DBMS products such as MySQL and Postgre SQL have not yet had a significant impact on the market, their popularity among smaller businesses may eventually boost their presence to more significant numbers. Linux is also starting to have an impact in the OS arena ­ nine percent of solutions under 100GB run on Linux, just behind Solaris and just ahead of HP-UX.

As for the tools and applications that are an integral part of these solutions, the debate about the benefits of writing custom code versus buying off-the-shelf packages continues. Even with the increased availability of packaged software that fits almost any requirement, many organizations, particularly small businesses, continue to use custom-built software. The packages that small businesses do purchase come primarily from Microsoft, Oracle, Cognos and Seagate with Microsoft the heavy favorite.

It is apparent that Microsoft's strength is being generated by its penetration of the low end of the market and its use in smaller solutions. As an example, the number of respondents citing Microsoft as the supplier of cross- industry analytical applications falls off from 17 percent for solutions with less than 100GB of useful data to nine percent for solutions with 100 to 999GB and to just three percent for solutions with 1TB or more. Hyperion, Micro- Strategy and Oracle each have more than twice Microsoft's share for solutions of 1TB or greater in size.

Building Momentum

While small and large businesses exhibit many differences in their implementations of warehousing/BI solutions, they are united in the business problems they are trying to address. Although financial analysis and reporting and communicating with employees are identified as key business issues, businesses of all sizes are increasingly focusing their solutions resources on CRM and customer-related issues collectively.

Although many vendors consider the low end of the market unattractive, they should realize that small- and medium-sized businesses will boost spending over the next several years. On average, small businesses currently spend about $124,000 annually on warehousing/BI solutions. That will increase threefold in the next three years according to the study's results, whereas large business spending will increase only about 1.6 times.

The expansion at the low end will help facilitate continued growth even as the market feels the effect of recent economic turmoil and the associated reduction in technology spending. Just as their larger brethren, small- and medium-sized businesses seek technology that will improve business operations and their bottom line. With new tools, applications and open source components at their disposal, these businesses should reap the benefits of warehousing/ BI in growing numbers.

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