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The rise and rise of Business Intelligence
By Madan Sheina
Madan Sheina rounds up the latest developments in the booming business intelligence sector.
 While other segments of the enterprise software sector are floundering, interest and adoption in business intelligence continues to rise. CIOs recently surveyed by Gartner listed it as their number two technology priority for this year; and Forrester Research predicts that the BI reporting and analysis tools and applications software segment will top $7.3bn by 2008.
Underlying the growth are qualitative changes in the way BI is being packaged and delivered. The monopoly that a handful of independent BI vendors once held by selling premium-priced tools to a handful of business analysts is coming to an end. BI is getting more affordable.
The expansion of BI deployments is a trend to look out for this year, as companies try to convince users that BI technologies have been overlooked in the past. Second and third-generation BI deployments are opening up BI to mainstream front-line workers with friendlier, less-complicated analysis and querying techniques and creative ways of presenting information gleaned from once-intimidating BI tools, while at the same time providing IT departments with faster and 'cleaner' deployment options.
BI is also being implemented as less of an afterthought for IT infrastructures, being integrated into the design fabric of corporate IT infrastructures from the outset. Notable trends pointing in this direction include the emergence of operational BI, which embeds intelligence as part of key business processes. It is no surprise that vendors such as SAP and Oracle are angling to leverage their NetWeaver and Fusion Middleware application integration platforms, respectively, to link BI to their unique understanding of business processes.
This will also be a pivotal year for the evolution of the BI suite, marking a departure from the traditional best-of-breed tools approach. Leading BI vendors such as Business Objects, Cognos and Hyperion have ploughed significant resources into re-architecting their once disparate tools and applications to work together as part of a platform: for example, Business Objects XI, Cognos 8 and Hyperion System 9.
Touting slick new service-oriented architectures, these suites are not like the departmentally focused BI tools of yesteryear. Their emphasis is on driving BI standardisation across the enterprise by integrating OLAP, query and reporting, dashboards and even data integration. These BI suites are now generally available and BI vendors are now in the midst of transitioning their customers, which might account for the recent financial hiccups from several normally rock-solid BI performers.
Dovetailing technical, business and economic factors are swinging the pendulum away from point-tool functionality towards breadth-of-platform coverage and integration that will influence BI buying decisions in 2006. Standardisation is being driven by IT groups that want to lower costs through better licensing deals, hardware consolidation and reducing development and maintenance costs.
Having to maintain in-house IT skills for one BI vendor is a much cheaper proposition for companies. As vendors position themselves as one-stop-shop providers for all of an organisation's BI needs, expect the BI battlefield to be riddled with rallying cries of 'one product', and 'one architecture' this year.
Disruptive forces like open source software, software as a service (SaaS) and the entry of larger, fearsome software players such as Microsoft, Oracle, IBM and SAP into the market are changing the BI landscape and raising the competitive stakes for established BI vendors.
Open source continues to make inroads into BI thanks to JasperSoft and Eclipse Business Intelligence Reporting Tool (BIRT) projects as well as the more ambitious BI suite that Pentaho has in mind. While it is unlikely that open source will do to BI what Linux has done to the Unix market, it does bring welcome competition and price pressure to a market that has for too long been dominated by proprietary software.
It is true that BI has not dabbled seriously in the hosted, SaaS model. But established BI vendors Business Objects and SAS Institute and newer players such as Oco Software and Host Analytics are testing the SaaS waters as a way to lower the bar for BI and analytic systems deployment. SaaS certainly offers an interesting new way for BI vendors to overcome cost and complexity barriers, particularly for SMBs that do not have the resources of skills in-house to install and manage complex BI and analytics.
BI also continues to attract new technical innovations, particularly around memory-based OLAP architectures and real-time analytics, with vendors such as QlikTech and Edge Dynamics also forcing a rethink of traditional cube-based load-aggregate-and query BI models.
Perhaps the most interesting new development has been around melding enterprise search with BI as a way to bring BI to the masses. The ubiquity of search is certainly changing user expectations about BI: users are increasingly asking why their BI tools are difficult to use, while at the same time they can rattle off Google searches by the dozen and get instant answers to questions. Expect search to be layered on top of BI infrastructures as a fast, easy self-serve BI-like interface.
Of course, search tools tend to pop up in areas where BI has not worked well. One area is gleaning intelligence from mountains of unstructured data. A key benefit of melding these two technologies is to unlock previously inaccessible and unsearchable unstructured data such as HTML files and link it into structured BI data analysis and reports.
Meanwhile, larger relational database vendors like Oracle and Microsoft are also starting to bundle comprehensive BI capabilities as part of their core database platforms.
Until recently, Oracle had a BI solution that was loosely positioned within its database stack. The newly revamped trio of applications it announced earlier this year have now been positioned within Oracle Fusion Middleware, opening them up to non-Oracle databases and applications. Oracle's product revamp was not wholly unexpected since its acquisition of Siebel's Analytics business.
But the most decisive move of late has been by Microsoft. The biggest BI story of last year was the launch of Microsoft SQL Server 2005, which comes with significantly enhanced functionality in the areas of data integration, OLAP analysis and enterprise reporting. Microsoft followed this up by acquiring long-time.
BI partner ProClarity, which gives it a much-needed front-end strategy. Microsoft was also busy on other, non-SQL Server-related fronts announcing its first-ever BPM product, Business Scorecard Manager, and disclosing an integral role for its SharePoint collaborative technologies in its BI desktop of the future. These moves clearly signal Microsoft's intent to muscle in on the home territory of traditional enterprise BI vendors.
BI rivals are quick to dismiss Microsoft and Oracle as being too 'home-grown' for enterprise use. But BI vendors are smarting from the increased commoditisation that both these vendors are driving into the market.
The changing competitive landscape, not to mention commoditisation of staple reporting OLAP and ETL tools by larger database vendors, is forcing some pure-play BI vendors to extend the functionality of their BI suites into new areas. Independent BI vendors have been busy trying to differentiate themselves and their BI suites with a spate of technology-focused acquisitions. Whatever the path for differentiation, expect the BI market to see a frantic period of further acquisitions before it returns to some form of equilibrium.
(This article was originally published on Computer Business Review Online)
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