My last post introduced four major BI market trends that, I believe, will create dramatic change in the coming year. This post will examine the first trend of these trends . . . and the one that is arguably the most obvious. During 2007, three major Business Intelligence vendors – Hyperion, Cognos and Business Objects - were acquired by Oracle, IBM, and SAP respectively. After more than a year of letting the dust settle, these mega-companies began describing their newly-rationalized, post-acquisition product roadmaps. Regardless of the quality of those roadmaps, some customers are disappointed for at least one of four reasons:
1. Discontinued products. Customers’ favored products are being discontinued in order to merge multiple products across many categories.
2. Stifled innovation. Behemoths are moving sideways, rationalizing code bases and choosing winners and losers, rather than moving forward.
3. Vendor like-ability. Customers’ BI products have become acquired by a vendor with which, for any number of reasons, they don’t feel they can do business.
4. Complex products with expensive licensing options. This will only get worse – more complex and even pricier - because these largest software providers have to cater to the largest, most sophisticated customers of business intelligence.
We haven’t seen the end of this ripple effect. I contend that, in 2009, the consolidation of these largest BI vendors will continue to frustrate customers and in an even more challenging year than the one we just put behind us. This will, without a doubt, provide more opportunity for smaller, faster, and more modern BI software providers because of the disappointment customers feel across each of the reasons cited. In fact, as 2009 matures, the effects from each of these will fuel growth for those business intelligence software providers who cleverly solve a specific business problem that the largest vendors have forsaken. This confluence of “disruptive innovation” and business intelligence is cited by Steve Miller (of OpenBI) in an article written late last year, entitled “Open Source BI as a Disruptive Technology”. Supporting the need for faster innovation, Steve describes the core disruption coming from commercial open source BI (COSBI) vendors:
“At the heart of the [Commercial Open Source BI]-led disruption is technology innovation, which is occurring on a larger scale and in ways not experienced by the traditional proprietary software market. COSBI leverages a worldwide community of volunteer development talent stewarded by professional R&D teams to create a global innovation engine. This combination is critical to COSBI success because the magnitude of community development effort enables a high trajectory of product improvement, while core vendor-employee R&D teams are free to focus on marketable innovations.”
What do you think? Will these ripples from vendor consolidation play out in ways consistent with my prediction?
Chief Executive Officer