The Business Intelligence Market Outlook: Key drivers, market challenges and vendor strategies for future growth

IT majors need a new rallying cry to get big businesses and wider user communities excited about new types of IT systems, driving IT spend across the wider economy. There is a sense of agreement among the leading IT vendors that Business Intelligence (BI) is that rallying cry. Key IT vendors such as IBM, SAP, Oracle, Microsoft and SAS have made a series of acquisitions in the space, and the centrality of Business Intelligence in their overall marketing messages is testimony to the emergence of Business Intelligence as the ‘next big application of the future’.
This report closely examines the Business Intelligence supply side, looking at how BI vendors are performing in the context of helping organizations to understand their past state, comprehend their present state and predict what to expect in the future.
Beyond the BI supply side, this report assesses the state of the global BI market from the demand side perspective. Demand side analysis investigates the uptake of BI globally, investments on current BI use and planned future use, and usage of BI in key verticals such as banking and insurance, healthcare and pharmaceuticals, government, retail and telecom.

Key features of this report

• Definitions of key terms
• Provides Business Intelligence market sizing and forecast to 2013.
• Analysis of proprietary data related to Business Intelligence usage gathered from surveys of CIOs across a wide variety of vertical sectors and geographic regions, and of leading BI vendors.
• In-depth examination of key vendor offerings and strategies.
• Case studies of organizations that have adopted Business Intelligence.
• Analysis of key technological and market issues affecting Business Intelligence market growth.
Scope of this report
• Establish the size of the BI market and identify growth drivers and patterns.
• Understand the challenges that still stand in the way of BI market development.
• Identify the types of organization that are adopting BI by size and vertical industry.
• Identify the buy-side priorities in the context of BI usage.
• Gain insight into future BI usage by enterprise functions and components
• Gain insight into the offerings and strategies of key and emerging vendors in the BI space.
• Gain insight into the direction in which the BI market is heading and what it could offer in the future.

Key Market Issues

• BI is increasingly becoming a central theme in most major IT offerings. Key IT vendors such as IBM, SAP, Oracle, Microsoft and SAS have made a series of acquisitions in the space, and the centrality of Business Intelligence in their overall marketing messages is testimony to the emergence of Business Intelligence as the ‘next big application of the future’
• Growth of the BI market has been phenomenal. BI is probably one of the very few segments of the IT market which has seen double digit growth in this difficult economic climate.
• Mega-acquisitions have had a far-reaching effect on BI market development. The impact of IBM, SAP and Oracle’s entry into the BI market through their recent BI pure play acquisitions is propelling these IT majors to position themselves further away from being fixated with a particular type of data format, towards enhanced understanding and capabilities of managing diverse data types and formats.

Key findings from this report

• The global Business Intelligence market was worth around $8.4bn in 2008, and is forecasted to grow to $13bn by 2013.
• Market growth will be driven by factors including acquisition synergies resulting from data management providers acquiring pure play BI vendors, leading to new types of business analytics services and therefore new market opportunities. Other key drivers include increasing uptake of BI and business optimization, an overarching need for business transparency, better corporate governance and the need comply with stricter regulations.
• Of those organizations which do not currently use BI tools, the biggest barriers to uptake are cost and complexity.
• A lack of mining capabilities for unstructured data such as text, incompatibility of BI solutions with inter-vendor ERP/CRM systems, and lack of understanding of available BI services among the mid-market users are major stumbling blocks for wider adoption of BI.
• The vendor landscape is heavily dominated by the big five: IBM Cognos, SAP BusinessObjects, Oracle Hyperion, SAS and Microsoft.SAP. BusinessObjects and IBM Cognos lead the global BI market followed by SAS, Oracle Hyperion and Microsoft.

Key questions answered

• How big is the global BI market?
• What is driving BI market growth?
• What types of organizations use BI? In which enterprise functions? For what purposes?
• What are the main priorities for organizations, and how does that relate to their usage of BI?
• Who are the leading players in the BI vendor space? What are their growth strategies?
• What does the future hold for BI?
• How can BI deliver real value to the end user?


Report Highlights

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Table of Contents
The Business Intelligence Market Outlook
Executive summary 10
The Business Intelligence market 10
The Business Intelligence demand side 11
The vendor landscape 11
The future of the Business Intelligence market 12
Chapter 1 Introduction 14
Introduction 14
Who is this report for? 16
Research methodology 16
Definitions 17
Business Intelligence 17
Analytics 17
OLAP 17
Enterprise Performance Management 17
SG&A 17
Chapter 2 The Business Intelligence market 20
Summary 20
Introduction 21
Market growth and drivers 21
Market size and forecast 22
Market drivers 23
Acquisition synergies from IT majors acquiring BI pure plays 23
Need for greater business transparency, corporate governance and compliance 24
Complexity of products, services, channels and customer base 25
Rise of emerging markets 26
Market challenges 26
Client difficulties in acquiring and retaining customers 27
Incompatibility of BI solutions with existing systems 27
Changing customer demands and competitive offerings 27
Extract, Transform and Load (ETL) issues arising out of new acquisitions 28
Penetrating the mid-market 28
Business Intelligence uptake 29
Current usage 29
Uptake by organization size 31
Uptake by vertical market 33
BI component buying propensity by non-users 35
Short-term BI drivers among current non-users 36
Short-term BI drivers among current users 38
Longer-term BI drivers among current users 39
BI usage forecast by components 40
Short-term BI usage forecast by enterprise functions 42
Planned increases in spending on Business Intelligence 43
Plans to increase usage: case for persuasion 45
Chapter 3 The Business Intelligence demand side 50
Summary 50
Introduction 50
Organizational priorities 51
Cost reduction: which areas to target? 52
Reducing SG&A costs 52
Cost reduction priorities 54
Business Intelligence users – case studies 57
Amenities Inc. – managing sales, cost of sales and profitability 57
Dr Pepper Snapple Group – cost analysis, capital budgeting and order fulfillment decisions 58
Chapter 4 The vendor landscape 62
Summary 62
Introduction 62
The big five 63
SAP BusinessObjects 63
Background, offering and performance 63
Clients 67
Partners 70
Competitors 71
Strategy 72
IBM Business Intelligence: Cognos, SPSS, ILOG and IBM BAO 75
Background, offering and performance 75
Clients 80
Partners 82
Competitors 82
Strategy 83
Microsoft Business Intelligence 86
Background, offering and performance 86
Clients 86
Partners 87
Competitors 87
Strategy 88
SAS 88
Background, offering and performance 88
Clients 90
Partners 93
Competitors 94
Strategy 94
Oracle 95
Background, offering and performance 95
Clients 97
Partners 99
Competitors 99
Strategy 99
The big five – summary 101
Mid-size and niche players 102
TIBCO Spotfire 102
Background, offering and performance 102
Clients 103
Partners 104
Competitors 105
Strategy 105
MicroStrategy 106
Background, offering and performance 106
Clients 107
Partners 108
Competitors 109
Strategy 109
Information Builders 110
Chapter 5 The future of the Business Intelligence market 114
Summary 114
Introduction 114
Future capabilities 115
The rise of social network analytics 115
Simplified exploratory search to drive BI market growth 115
BI applications increasingly capable of delivering recommendations at the point of impact 116
Trends in the BI market 119
Consolidation 119
Faster BI with richer visuals 120
Pervasive Analytic Applications 120
Expanding role of Business Intelligence 121
Chapter 6 Appendix 123
Index 123

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List of Figures
Figure 2.1: Business Intelligence global market size ($bn), 2008-2013 22
Figure 2.2: BI usage by organizations (% CIO respondents, 2009) 30
Figure 2.3: BI users by organization size (% CIO respondents, 2009) 31
Figure 2.4: Current BI users by vertical market (% CIO respondents using BI), 2009 33
Figure 2.5: Propensity of current BI non-users to buy key BI components in 2010 35
Figure 2.6: Short-term factors most likely to drive BI uptake among current non-users 37
Figure 2.7: Short-term factors most likely to drive BI uptake among current users 38
Figure 2.8: Longer-term factors likely to drive BI uptake among current users 40
Figure 2.9: Forecast of BI usage by components (% respondents) 41
Figure 2.10: Forecast of BI usage by enterprise functions (% respondents) 42
Figure 2.11: Current user plans to change spending on BI in 2010 44
Figure 2.12: Case for persuasion: current BI user indecisiveness by enterprise functions 46
Figure 3.13: Organizational Priorities 51
Figure 3.14: Is reducing SG&A costs a high priority for CIOs in 2010? 53
Figure 3.15: Cost reduction priorities by enterprise function 54
Figure 4.16: SAP BusinessObjects BI offerings 66
Figure 4.17: IBM Cognos BI offerings 76
Figure 4.18: IBM Cognos Analytic Applications 78
Figure 4.19: The big five – summary 101
Figure 4.20: TIBCO Spotfire’s BI offerings – platform overview 103
List of Tables
Table 2.1: Business Intelligence global market size ($bn), 2008-2013 22
Table 2.2: BI usage by organizations (% CIO respondents), 2009 30
Table 2.3: BI users by organization size (% CIO respondents, 2009) 31
Table 2.4: Current BI users by vertical market (% CIO respondents using BI, 2009) 34
Table 2.5: Propensity of current BI non-users to buy key BI components in 2010 36
Table 2.6: Short-term factors most likely to drive BI uptake among current non-users 37
Table 2.7: Short-term factors most likely to drive BI uptake among current users 39
Table 2.8: Longer-term factors likely to drive BI uptake among current users (% CIO respondents currently using BI) 40
Table 2.9: Forecast of BI usage by components (% respondents currently using BI) 41
Table 2.10: Forecast of BI usage by enterprise functions (% respondents currently using BI) 43
Table 2.11: Current user plans to change spending on BI in 2010 (% CIO respondents) 45
Table 2.12: Case for persuasion: current BI user indecisiveness by enterprise functions (% CIO respondents) 46
Table 3.13: Is reducing SG&A costs a high priority for CIOs in 2010? 53

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