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Business intelligence market
consolidation won’t terminate Innovation CA
Ashwin Dedhia Business intelligence (BI) is no longer a
back-office, nice-to-have application. It's the next business
differentiator. Acquisitions & mergers are taking place in BI and
corporate performance management (CPM) market. 2007 has been the year
of dramatic BI consolidation. One of the hottest segments of the tech
industry, BI software, is going through a major phase of consolidation as one
major player after another is acquired by larger companies. Oracle overlaps its BI
products with Hyperion: Hyperion
itself was based on a series of mergers and acquisitions, bringing together
products that originated in at least a dozen separate companies and in
Oracle, it has joined a BI/CPM stable. There is considerable
overlap between these various BI products: for example, there are several
different relational reporting tools, and several OLAP servers. Oracle’s
home-grown BI tools and applications are the weakest & unsuccessful.
These were replaced by the equivalent Hyperion products. Ironically, Hyperion had
spent the previous 18 months starting the integration of its many tools into
its new System; now Oracle started this all over again, in an attempt to
rationalize and merge its messy range of overlapping BI and CPM tools, and
then integrate them with its other tools and applications. This is a
rough ride for both Oracle’s products and their users. Customers should ask:
SAP
abandons its organic growth strategy to acquire Business Objects: The wave of BI
acquisitions in 2007 got a dramatic boost on October 7, when SAP announced
that it was acquiring Business Objects for €4.8bn ($6.8bn) cash (or $5.9bn
net of cash in hand). This was by far the largest BI acquisition,
expected to be completed in Q1 2008, and is almost certainly another response
to Oracle’s acquisition of Hyperion earlier in the year. There are several questions a customer should ask
with this deal:
IBM
tries on application software business by buying Cognos: Though
there is little product overlap between the product ranges, IBM’s large
services business with other BI vendors’ products may suffer. Also, unlike
other large BI acquisitions, there are few apparent synergies between the IBM
and Cognos software businesses — IBM has in recent years focused on
infrastructure rather than application software. Its earlier forays into BI
have all been less than successful & came to a sticky end, and it had
looked like a bruised IBM had turned its back on the BI software business.
Cognos
was more worried than it claimed about the prospect of having to compete as
an independent against Oracle, SAP and Microsoft.
As IBM does not have an existing BI software business, forced
integration with other parts of IBM probably would not make much sense. IBM
Customers should ask "When will they be able to integrate the Cognos
stack into their IBM solutions?" Cognos customers who are not IBM users
should ask, "Will you force me to install IBM infrastructure in future
upgrades?" and "How will this affect the existing integration
projects?" What
will happen to the remaining BI vendors? The remaining
players, including SAS, MicroStrategy and Teradata, are likely to be in the
sights of larger companies looking to cash in on what has become a
full-fledged boom. What will they gain out of these acquisitions? While
it gives the acquirers major market share, it potentially limits the BI
vendor’s technology to an acquirer-only solution in the future. Most
organizations still need an independent BI solution because they possess a
collection of data, applications and platforms from multiple vendors. Customers should be concerned about their ability to
openly leverage their current investment strategies in the future. The
goal of acquirers has been to move customers toward their offerings, which
may not be in the best interest of current BI customers. Another
concern may be the integration of their multiple development organizations. In spite of the growing M&A, BI remains
difficult to implement. Lot of customers say that BI is really hard to
use. They are not getting the value out of their investments that they
have made. After having invested a lot in back-end systems, less than 10
percent of their employees actually touch it, or get access to the data. Few
BI customers have around six different BI solutions across multiple different
departments, none of which talk to each other. And they're hard to use, so BI
customers have to send people to training for months to learn how to use it. Too often large companies focus on only their
largest customers, instead of understanding the market needs across the
board. What customers do want when it comes to managing information is an
independent information management layer that can seamlessly integrate with
both transaction systems and end-user tools, like Hyperion, BO, Cognos &
others. Then and only then will they be able to give customers what they
want- independence and choice to leverage the BI platform that makes the most
sense for their individual requirements. Any BI customer needs to
take a look at their current deployment and determine if end users are
adopting the technology, and if the solution is helping enable
decision-making in the context of a mission-critical business process that
invariably spans multiple data sources, including real-time data. Customers
want solutions that deliver real-time decision-making for end-users across
the organization. How will all the above vendors address this trend? CIOs
today prefer to purchase their BI from an independent vendor – not an
application or database vendor. Customers
have multiple ERP systems and warehouses like SAP, Oracle E-Business, JD
Edwards, Siebel, Peoplesoft, Microsoft, IBM, and Teradata, and they have
other data sources such as XML, Excel, and Blogs. And they also have a mixed
bag of infrastructure like Portals, Security systems and Application Servers
and as they acquire and merge with other companies these scenarios get even
more complex. Customers need an independent performance layer that fits
into their enterprise infrastructure and that sits on top of all of their
applications and data sources. MAIA
perspective: BI markets
continue to evolve. There's still plenty of room for growth in the BI
market. The BI market has only penetrated 10 to 15 percent of the known
user base, but there is a vast opportunity for BI well beyond today’s known
markets. MAIA does not see this
trend as a threat. Unlike traditional BI tools like Hyperion, BO & Cognos
which emphasize centrally managed reports and dashboards, MAIA’s interactive,
visual capabilities for data analysis help line of business users across
organizations easily spot trends, outliers, and insights in the information
they use every day without having to wait for new reports. Operational BI is the call of the day. MAIA
has a vision is to deliver what customers want through a single, integrated
solution and provide pervasive BI through high-performance, value for money
BI solutions for all business users throughout the organization, leading to
better, faster, more relevant decisions. MAIA has ability to deliver
on-demand BI to the un-served masses and our wide-reaching data integration. MAIA works with customers who are looking to deploy
1KEY as a way to augment their current BI tools and get more ROI from their
existing investments. This is another signal that traditional BI is becoming
part of the application infrastructure stack. |
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