Since its inception in the 1970s, BI was for the little guys. Lots of little BI companies. Some made it big for a while before being acquired, others went out of business. Small innovative specialists. Over the years there has been 100s, if not 1000s of little BI software companies. As time went by the cream came to the top of the milk and three little BI companies became $1Bn revenue best-of-breed champions: Business Objects, Cognos and SAS. Now there are two.
The BI market (and the software market as a whole) is starting to have the look of the automotive market. Before the war there were 100+ US car manufacturers. By year 2000 there were 5. Many of these manufacturers are still around and are run as separate Business Units by their larger owners. Skoda is one example. Interestingly, this is how Cognos will treat Applix (see Cognos acquires Applix) and how SAP will treat Business Objects. Conversely Oracle and Microsoft integrate their acquisitions into their organisations.
Thirteen months ago, in September 2006, I wrote CPM and BI: Market Trends Compared & Contrasted. In this article I detailed 34 "top" BI vendors: 8 enterprise applications vendors in both BI and CPM markets, and 13 best-of-breed vendors in each of BI and CPM markets. How many have the same financial ownership as 13 months ago? (A) = Acquired.
In both the Bloor BI report and the Bloor CPM report were Actuate, Business Objects (A), Cognos, Hyperion (A), Microsoft, Oracle, SAP, and SAS. Only in the BI report were IBM, ICS, Inflection Point, Information Builders, JasperSoft, MicroStrategy, Noetix, Panorama, Pentaho, Qliktech, Spotfire (A), SSA Global (A) and Temtec (A). Only in the CPM report were ALG (A), Applix (A), BoardMIT, Cartesis (A), Clarity Systems, CODA, Extensity (A), Longview (A), OutlookSoft (A), Pilot Software (A), Sage, SymphonyRPM (merged) and Teradata (spun off from NCR).
20 remain untouched (NB many are virtually untouchable - either too large to be acquired or privately owned); 14 have changed hands. The market has commoditised and consolidated. This becomes even clearer when we take a closer look at Oracle, SAP, and Microsoft's BI acquisitions.
Oracle has acquired 15 companies - AppSource, Alcar, Arbor, Brio, Decisioneering, Hyperion, IMRS, IRI Software, PeopleSoft, Pillar, Razza, Sapling, Siebel, Sqribe and Upstream. SAP has acquired 11 companies - Outlooksoft, Pilot Software; and Business Objects' 8 acquisitions - ALG, Cartesis, Crystal Decisions, Firstlogic, Next Action Technology, OLAP@Work, SRC and Inxight. Not forgetting SAPs own wide stable of BI products that include BPS, SEM, Integrated Planning, ECCS etc - and the same principle applies to Oracle. Even Microsoft (not knownuntil recently for multiple acquisitions) has acquired 4 companies (Maximal, Panorama, ProClarity and Stratature). 3 companies, 30 acquisitions, 100s of BI products, over 100,000 BI customers.
Of course there will always be BI niches available for small innovative companies like Tableau and Qliktech. But most large enterprises will eventually standardise on the perceived low risk enterprise applications "stacks", of which BI will be one component, of the giants - SAP, Oracle and Microsoft. Like the car market, the BI market will be a less exciting and vibrant place but hey, that's business.
As for the SAP / BO deal, Philip Howard has already made some interesting comments in his article Business Objects and SAP: the good, the bad and the ugly. It is a shame - BO was doing some really interesting things as I detailed in Business Objects sharpens up their act to impress the market. SAP's share price dropped 5% on the news of the Business Objects acquisition so the synergies cannot be so clear. But at least the acquisition will bolster SAP's flagging efforts in the BI market. Will IBM finally pluck up enough courage to acquire Cognos? It's now or never . . .
Sorry, we are no longer accepting comments on this item. We suggest trying to contact the author directly.
13th October 2007: 'Arman Eshraghi, Founder and CEO - LogiXML' said:
Gerry,
From many aspects BI market today is different from automotive market after war. I understand that out of 34 members of your old list, 14 members have been acquired but at the same time you could easily add more than 14 new companies to your list: LogiXML (that I am affiliated with), LucidEra, SeaTab, (new) Visual Sciences, OnDemandIQ just to name a few.
I would look at the following metric:
[Revenue generated from new customers / Total Revenue]
When this value is close to ZERO (and the definition of close is different for subscription model) for a successful company - such as BusinessObjects - means time to sell and retire and for the rest, who are not successful, it may mean going out of business.
Obviously we have a number of established and traditional BI leaders in retirement phase. At the same time we see some future leaders for the new BI are emerging. Back to your automotive analogy; just imagine a time that people could wear a jacket and fly to commute faster, cheaper, easier and safer. Probably at that time you could see BOB Joe car company is sold to SA Port who still needs cars to carry packages.
Believe or not Web has changed the BI world. The new BI is much less expensive, based on XML and in-memory processing performs faster, embraces open technologies and standards such as XML and Web Services that makes it much easier to use, implement, deploy and maintain so everybody can use it and not just experts and data analysts. Also as Web 2.0 it is more interactive and provides richer functionalities.
I speak with analysts very often and sometimes I ask if they think products like BusinessObjects XI or Crystal Reports XI are actually Web-based (or only support Web)? For most cases, they judge based on the fact that the result is delivered via a Web browser or not. I think this is source of the confusion; Wearing a jacket and driving a car is different from wearing a jacket and fly without the car!
Sorry for the long answer.
Kind regards,
Arman Eshraghi
Founder and CEO, LogiXML
Reply to Arman Eshraghi, Founder and CEO - LogiXML?
