For the third year in a row, business intelligence (BI) applications have been ranked the top technology priority in the 2008 Gartner Executive Programmes survey of 1,500 CIOs.
According to Gartner, this is because CIOs know they must implement a BI strategy properly if they want to accomplish many other priorities, such as customer service improvement and legacy application modernisation.
Speaking ahead of the Gartner Business Intelligence & Information Management Summit in Sydney on March 18-19, the research firm said the market for BI software will remain healthy but is facing radical change as acquisitions, new delivery models like software-as-a-service and emerging social software tools are accelerating innovation in the sector.
Revenue for BI software vendors in the Asia-Pacific region between now and 2011 is expected to increase by a CAGR (compund annual growth rate) of 15.5%, according to Gartner.
"Greenfield" opportunities, together with fast economic and structural developments, are fuelling higher double-digit growth in many Asia-Pacific countries. However, worldwide growth rates are slowing, and will move into single-digits beyond by 2011, with a five-year compound annual growth rate (CAGR) of 8.6%.
Gartner senior research analyst Bhavish Sood, who presented at the Gartner BI Summit, said the days of strong double-digit growth in the global business intelligence market are over, as the industry enters a state of flux following vendor consolidation, increasing maturity and price erosion. "However, BI remains critical for businesses as it turns information into an asset for insight and decision making, especially in high-growth markets in Asia," he says.
The buyouts Sood mentions continue to impact customer decision-making. The acquisitions of Hyperion by Oracle and Business Objects by SAP, as well as Cognos by IBM, disrupted the market. Overall, more than two-thirds of the current BI market is now attributed to the mega-vendors.
The remaining BI powerhouse vendors SAS, Microstrategy, Information Builders, as well as smaller BI vendors, such as Arcplan, Panorama, or Qliktech, will need to increase market push to stay visible above the increased noise from the 'big four'. According to Gartner, value to users can also increase as a result of mergers and acquisitions.
"Consolidation activities by SAP, Oracle, IBM and Microsoft should help accelerate the value derived from BI," Sood says. "Large vendors will drive increased usage, while new BI vendors will emerge introducing innovative technology and products to demonstrate differentiation and fill the gaps in the mega-vendors product lines."
Gartner advises end-users of BI applications from vendors that have been recently acquired to hold strategic investments until a product roadmap has been clearly presented from the vendor.
While there is no doubt that the acquired core products, such as Oracle's Hyperion Essbase, Business Objects XI, or Cognos 8 will remain highly strategic and supported by extensive research and development funding, overlapping products in a vendor's portfolio may see some de-focus in the mid-term.
Sood says increased BI innovation means that query, reporting and online analytical processing (OLAP) capabilities have reached parity and no longer deliver a competitive edge. Most vendors now include these basic BI capabilities in their product stacks, including Microsoft, which has added more BI functionalities in SQL Server 2008, Office 2007 and PerformancePoint Server.
Successful pure-play BI vendors will incorporate emerging technologies in BI such as dashboards, predictive modelling, enterprise search, social software, interactive visualisation techniques and in-memory analytics. Hosted BI through software-as-a-service (SaaS) is one new approach being pioneered by a cluster of vendors including Seatab and LucidEra. Vendors can also thrive by specialising by industry or geographic region, according to Gartner.
John Bianalli, CIO of Dairy King in Australia, says the high level of interest in BI is about making better use of available assets. He says organisations also recognise the need to exploit data.
"It's about getting more bang for your buck. Organisations today are trying to squeeze every dollar they can from past software acquisitions," Bianalli says.
"Gartner's figures are no surprise, although I didn't expect BI to maintain its dominance for three years" he says.
"I'm looking at web services at the moment. Once again it's about trying to wean greater efficiencies from our systems."