A year and a half ago, my colleagues and I at Palo Alto Management Group forecast (in the multi-client study Large-Scale Database Solutions ) that users would be spending some $70 billion a year on data warehousing and decision support by the year 2001. This rather bullish forecast was scoffed at by most of our clients and positively ridiculed by several well-known forecasters, who had issued numbers much, much smaller than ours. But wouldn't you know it, six months after we issued that forecast, our clients and a bunch of other vendors that were not our clients began telling us that our numbers were actually way too low! Many of these same companies are enjoying annual growth rates of better than 100 percent in their data warehousing businesses with no end in sight, and fast- rising players like Microsoft and Hewlett-Packard are telling us they don't have enough people to return the phone calls of prospects and would-be partners. I recall one practice manager from a Big Five consultancy telling me that he could immediately employ another 5,000 people in his data warehousing practice if only he could hire them!

This year, we did another worldwide study called Data Solutions II, and now we can tell one of those good news/bad news stories. The bad news is that we were dead wrong a year ago. The good news is that we were wrong on the downside--the market is going to be a lot bigger than we thought! Our magic number is now $113.5 billion for the year 2002!

With all that action in the offing, it is no surprise that there are literally hundreds of companies vying for a piece of this very large pie. Nevertheless, in calendar 1997, just eight companies accounted for nearly half the market. These were IBM, Oracle, NCR, H-P, Compaq (including Tandem and Digital), Sun Microsystems, SAS and Andersen Consulting. Although it's not likely that any of these organizations will lose their high rankings anytime soon, there are a lot of other companies out there, many of which are both well heeled and very aggressive. A few familiar names you might expect to hear from (if you haven't already) include Microsoft, SAP, Baan, PeopleSoft, Siemens, Computer Associates, PricewaterhouseCoopers, CSC, KPMG and Perot Systems. Believe me, this list barely scratches the surface.

Many of the things we found in our first study are confirmed by the results of the current project. For instance, most users project very high growth rates in the size of the databases kept in their warehouses. In fact, for large enterprises, we can look forward to an era where practically everyone will be dealing with terabytes. Organizations of all sizes anticipate using their warehouse(s) as the underlying technology of systems designed to distribute information to customers, employees and suppliers. So the number of users accessing a given warehouse can be expected to grow from a relatively small number of "knowledge workers" to a cast of thousands and even millions.

The results of our study also dispel a few popular notions. For example, it turns out that contrary to the stories appearing in the press, many of the users out there aren't interested in "packaged solutions." They simply don't believe it will be possible to find packaged solutions that meet their needs. The attitude is, if through a packaged solution, they can get faster deployment or lower their risk, that would be great; but most of these folks are from Missouri--they have to be shown, and that ain't easy.

One of the more interesting findings (I think) from the new study is that people are actually starting to give some serious consideration to the use of multimedia data. Eighteen months ago, most of the 178 companies we surveyed in the study thought that multimedia data would become important some day, but more than 95 percent hadn't a clue as to what it might be used for! This time around, we found that people are actually giving some serious thought to the subject. Most of the 375 companies we interviewed had a pretty good idea of the multimedia-based applications that might be useful to their organizations. We think it won't be too much longer before multimedia-enabled warehouses become de rigeur.

Another tidbit from the study is that DM Review is the number one publication Americans read for information about data warehousing, decision support, business intelligence, etc., beating out The Gartner Group, The Data Warehousing Institute, Information Week, Computerworld and a bunch of others. So as you read this, be sure to congratulate your astute self.

Readers interested in learning more results from the study are welcome to tap into the free stuff at www.pamg.com

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