Economic Outlook: Business Intelligence (Market Focus)

DATAMONITOR VIEW

CATALYST

SUMMARY

METHODOLOGY

ANALYSIS

Market Definition

Market Development

Upon initial consideration the BI market appears reasonably well penetrated and technologically mature. It is important to consider that BI is still deployed primarily as a department-level specialist tool running on top of enterprise applications or legacy systems. Should the number of enterprises that have deployed BI throughout large swathes of their organization be considered, take-up levels would be much lower. The situation may change, as investment levels are growing.

Much like the rest of enterprise applications, adoption has been led by larger enterprises and BI is still not ubiquitous among small and medium-sized enterprises. Anecdotal evidence indicates that the mid-market accounts for 30% to 40% of BI revenues. Most of the activity in this segment of the market originates in the top-end of the segment, among enterprises with 1,000 to 5,000 employees. This leaves a huge swathe of the market in which BI is not making enough of an impact.

BI take-up levels lag behind other technology areas

Datamonitor's Technology Trends data reinforces many of the points raised. The first relates to the relatively low level of penetration of BI technologies, certainly when compared to other enterprise applications. Out of eight technology areas covered by the Technology Trends survey in 2006, only Enterprise Mobility has a lower level of adoption than BI. Whereas up to 85% of enterprises interviewed in the survey, claim to have deployed enterprise applications, less than 60% of the enterprises have BI systems.

BI Investment is set to grow in the medium-term

Market drivers

The rise of the digital business

Enterprise applications form the backbone of the modern enterprise

Enterprises are generating increasing volumes of data

Organizations are seeking to protect enterprise application investments

Core BI technology has become commoditized

Market Trends

BI is being transformed from a specialist tool to a pervasive application

BI solutions are consolidating into comprehensive end-to-end platforms

Advanced analytics will also become more pervasive

BI will rapidly converge with enterprise applications

Industry-specific BI application bundles are a crucial go-to-market strategy

On-demand BI

Vendor strategy in the evolving BI market

Pervasive BI requires new BI interfaces

Enterprise-wide consolidation can be offered through single-vendor platforms or solution partnerships

Competition for CPM will increase and vendors should integrate CPM acquisitions quickly

Vertical solutions are a key differentiator in the commoditized market

On-Demand BI is developing but certain inhibitors are to be overcome

Vendor Positioning

Convergence and consolidation favors enterprise conglomerates' position in the BI market

Market Size

Between 2006 and 2012 the BI market is set to double

Large enterprises and industries generating high volumes of transactional data will lead the market growth

Summary

APPENDIX

Definitions

Extended methodology

Further reading

Ask the analyst

List of Tables

Table 1: 2006 penetration of technology areas covered in the 2006 Technology Trends survey

Table 2: Which of the following Business Intelligence technologies do you currently have and use?

Table 3: Which of the following technologies do you currently have or use, and which would you have in 6 months and 24 months time?

Table 4: Which of the following enterprise application technologies do you currently have or use, and which would you have in 6 months and 24 months time?

Table 5: Datamonitor's BI revenue model ($US millions, product license revenues only)

List of Figures

Figure 1: Business Intelligence and adjacent application areas

Figure 2: Take-up of BI solutions lags behind most of other technology areas

Figure 3: BI adoption levels are related to the enterprise size

Figure 4: Short- and medium-term investments in BI are set to increase

Figure 5: Adoption levels are proportional to the scope of their applicability

Figure 6: The wider adoption of enterprise applications is expanding the BI market

Figure 7: BI investments can derive further value from existing systems

Figure 8: Commoditization and the rise of digital enterprise dictate the dominant market trends

Figure 9: Advanced analytics are to become more pervasive through easier interface and embedding

Figure 10: Data infrastructure complexities hamper implementation of non-rudimentary functionality

Figure 11: The BI market is set to double in size between 2006 and 2012