The market for BI might seem rosy for most in the industry and while some analyst firms predict significant growth and BI already being a top priority for CIO’s which it is really not, most of us who have been in the industry for decades know a different reality. BI is not being adopted as fast as it could be in almost all organizations and is splintered across business and IT lines that have done more to hamper growth than support it. The overload of business continuing to use the flexibility of spreadsheets, presentations and email as I found in our decision-making and performance management benchmark research and moving slowly to lead new initiatives for BI and performance management. And as well IT has been seriously focused on optimizing IT budget and resources where more focus has been giving to the re-engineering of data management creating new technology buzz than to the accessibility and delivery of analytics and metrics to business.
Where does that leave the BI industry? Still justifying the necessity of having enterprise class BI or the specific needs of departmental and workgroup BI. Well, not moving as fast as it could be creating rifts and delays to the growth of the BI market. I earlier this year pointed out the importance of cloud computing for business where the use of subscribing to software in a rental basis could help organizations accelerate their implementation and use of software more rapidly. Over the last three to four years, many newer and other technology vendors re-entering the market have stepped into providing BI in this new subscription based approach where the software, hardware, storage and servers are maintained by the technology provider.
Many of these providers including Birst, BlinkLogic, LucidEra, Oco, PivotLink and others have been working to grow fast enough to grow a critical base of customers to gain market share. This has not been as easy as they would like as the buyers for BI have very different needs as those in business need more than just tools but context of their analytic needs and IT is looking at infrastructure they can integrate into their enterprise of applications and data repositories. With this divide, these vendors have struggled in their communication of what they provide the best to these audiences and have historically not provided enough depth for either audience to be successful in gain the velocity of new customers in any meaningful way. They have also not leveraged their position to extend and deliver value for business collaboration and access information across mobile devices which is a top priority or even integrate other information easily across the Internet in what I identified as Market Intelligence. Without significant differentiation and leveraging the need of integrating masses of spreadsheets and working more easily across businesses and processes, these vendors look more like basic BI than something that can expand the potential of BI in organizations.
I am not surprised at the results of many of these vendors as I have often met with the senior executives of these companies and tried to explain the complexities of marketing and selling in the BI market with tough choices to make and establish differentiation, but always ended up with the similar answer – ‘we know what we are doing’. Pretty interesting as many of these executives either had little experience in the BI industry or a lot of experience. Of course over the last year many of these vendors have begun to realize this reality I explain to many of them and started to build more line of business centric analytics and context to try to get VP, director and analysts within areas like sales and marketing or customer areas to more deeply look at their offering. For many, a little too late and with time running out in use of their crucial venture capital, the future is not so rosy.
Do not get me wrong, many of these vendors have some good capabilities but did not focus their efforts, ignored market research on what buyers in business and IT need from BI, and just forged ahead working through critical capital than instead of optimizing its use in a timely manner. The first vendor in this group to go is LucidEra who had some good technology but did not turn the corner and leave their initial BI focus and double-down in sales analytics and pipeline efforts fast enough before they last week ran out of money and closed their doors. This closing of the doors is not unusual in the software industry but leaves most of their customers in a lurch as they must now decide what to do next.  For many organizations who have been requesting advice on what risk should they take in adopting BI in a software as a service method, this is not an easy answer as there are large challenges for many of these vendors . Of course it does not help these vendors much when mainstream BI vendors like Information Builders now provide their software available in the Amazon software cloud and are well capitalized to survive any issues.
I would expect that we see more of this hybrid approach from larger, more capitalized commercial BI vendors who see the cost of entering this market as low, and operating their software in environments like Amazon or Google, and having a central staff anywhere in the world and manage it as not that difficult. It will probably be more challenging that I pointed out last year. So, the next year will be interesting to see who might fall next like LucidEra or become part of some larger organization who wants to acquire them, but BI will continue to have a slow and steady pace forward.