Customers stand to be the main beneficiaries of the reported slowdown and consolidation taking place in the business intelligence (BI) market. This is the prediction from Keith Jones, MD of Harvey Jones, South Africa's leading BI specialist.
Gartner recently predicted a slowdown in growth in the BI market during 2008 because of its increasing maturity.
"This is inevitable in any market," says Jones. "As the market matures, growth will inevitably slow. There are some relevant factors here - we have had a few years of significant growth, and the market is now substantial, so the growth percentage has to slow as the market size increases. Secondly, in South Africa we are a little behind the curve, so the market will probably continue growing as it catches up to the size and state of the US market."
Even so, says Jones, Gartner's expectation is that the BI market will continue to grow at 12.5% this year, and exceed $7 billion in value by 2011. "12.5% growth is not bad at all, particularly when many other sectors are showing middle-range single-digit growth and the BI market is now comfortably over $5 billion. It is all relative."
Gartner has predicted further consolidation in the market, but Jones says this is of little importance. "The stage is set, and the four main players have put up their hands - IBM, Microsoft, SAP and Oracle. There is no doubt they will own the lion's share of the market. Oracle and SAP now have more functionality than they can use, and their problem will be coming up with a coherent integrated offering. The likes of Informatica, SAS, Microstrategy and Actuate would be good targets for latecomers."
Another observation by Gartner is that there is increasing lack of product choice as companies are acquired, and product suites are rationalised, with a resultant lack of differentiation between BI solutions.
"This can only be a good thing for clients," Jones responds. "The offerings are cheaper and there are fewer differentiators so clients can now make sure BI starts to align with the corporate IT strategy instead of worrying about which offering to buy from a long list. It also means the selection process will hinge on the time to deploy and the experience of the services team. The client now has the option of going for low-risk BI - where some degree of success is guaranteed. This is where differentiation will occur."
Gartner has also stated that the corporate performance management (CPM) market is the one to chase, as it is the next phase of evolution of the BI market, and it increased by 20.2% last year. But Jones points out that there are "few if any BI vendors or services companies that do not see themselves as a CPM players or have the skills to do CPM. BI and CPM then are one market, growing at 16%. That changes the picture significantly: a multibillion market sector is growing at 16% a year, and customers are in charge. It seems the BI market is still a good place to be."
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