Business intelligence is dying: What’s next for analytics?

Register now

The business intelligence industry is in a free fall. Spend on BI tools will decrease more than 80 percent in 2018, according to the First Half 2018 Market Survey from Nucleus Research. Companies like Domo have been forced to go public at a fraction of their original valuations. And behemoths like MicroStrategy are in a spending spree despite stagnant revenue.

It’s not that people don’t want to analyze information. In fact, the demand is stronger than ever. Over 83 percent of business professionals want analytics in the applications they already use, instead of wasting precious time switching applications. Business intelligence is failing because users don’t want to leave their day-to-day applications to analyze data in a standalone BI tool.

Why BI Is Dying

Business intelligence hasn’t lived up to its promise to give users unprecedented access to business insights. Vendors have spent millions trying to improve their user experiences and deliver self-service. But nearly every BI tool forces users to leave their current workflows and open standalone applications to analyze data.

Increasingly, application teams are looking for new ways to deliver analytics that encourage user adoption and meet customer demand. Many are turning to embedded analytics solutions to help them deliver dashboards, reports, and self-service analytics in their applications.

Just look at the adoption rates for BI compared to embedded analytics. Users adopt embedded solutions twice as much as standalone tools. The only way to make sure everyone in an organization is on the same data page is to embed analytics in the applications they already use.

The Embedded Analytics Arms Race

As BI struggles, embedded analytics is growing. Embedded analytics now represents 60 percent of new or additional analytics purchases, according to Nucleus Research. Traditional BI vendors are trying hard to wedge themselves into the embedded analytics space, but their architectures, pricing models, and support structures haven’t proved to be well-suited for the needs of application teams.

“Not all analytics platforms were built to be embedded,” says Gartner in its 5 Best Practices for Choosing an Embedded Analytics Platform Provider report. “Some providers attempt to offer embedded analytics offerings that are the same products sold to direct customers but lack required capabilities for a truly embedded experience.”

When application teams attempt to leverage traditional BI solutions or build something themselves to deliver embedded analytics, they end up with a disjointed experience that users reject.

So, what’s the bottom line?

BI had a 20-plus-year run, but demand for standalone BI is waning while embedded analytics grows. People naturally want their information in context of where they work. It’s becoming harder for businesses to justify the price of traditional standalone BI when so many integrated solutions—complete with embedded analytics—are on the market.

Over the next few years, standalone BI vendors will need to rethink their architecture and business models if they really want to support embed analytics, or they’ll struggle to stay afloat.

For reprint and licensing requests for this article, click here.