Analyst Insight

2007 was the year of consolidation in the Business Intelligence / Performance Management (BI/PM) market.  Most companies saw one or more of their BI/PM technology vendors acquired by Oracle, SAP or IBM. While this consolidation in the market was not unexpected, it does create confusion or concern in organizations surrounding recent or planned BI/PM strategic platform decisions.  Many of these strategic BI/PM initiatives are multimillion-dollar, multi-year, projects that may have taken years to get approval. We may see a backlash of these initiatives being delayed as clients wait for Oracle, SAP and IBM to digest their acquisitions and sort out their BI/PM road maps.
-Dave Kasabian, research director at AMR Research

AMR Research finds that companies over the last several years have come to realize that the insight provided by BI/PM solutions not only maximizes the value of their significant investments in transaction systems but also provides the ability to optimize future performance. The tens of billions of dollars that Oracle, SAP and IBM have invested in acquisitions in this space reinforce our belief that clients should and will continue to invest heavily in these solutions going forward.  We believe clients should remain confident in the value of investing in BI/PM solutions even with uncertainty that the acquisitions of 2007 may create in the short term. 

Four reasons the value of BI/PM remains strong:

• Transaction Data. Companies have invested significantly in improving their transaction systems.  They now have access to more data from these systems than ever before.  Business intelligence solutions convert this data into usable information and expand access to this data far outside the typical breadth of transaction systems.

• Non-Transaction Data. The availability of data from outside the transaction systems has grown significantly in recent years. Whether it is from other sources inside the company, external benchmarking or competitive data, or unstructured data from any number of sources, the volume of available data is huge and continuing to grow exponentially.  Business intelligence solutions can distill that mountain of data into pertinent information that provides value to the business.

• Focused Insight. Massive amounts of data can become overwhelming. Business intelligence delivers the right information to the right people, at the right time, in the right format.  Exception-based alerts via dashboard, e-mail or mobile device and process-based analysis and workflow provide pertinent information in the context of the users' role.

• Prediction and Action. Trends can be identified, algorithms applied, and potential actions modeled to determine the best course of action to improve future performance across the organization.

The Outlook

The Future is Bright. All signs point to continued growth and investment in the BI/PM market that AMR Research predicted to reach $23.8bn in 2007. Buyers should demand clear road maps from vendors and should expect some additional consolidation in this market in 2008. The value that has driven market growth still remains, and we should expect additional innovations from smaller vendors looking to step into the void left by the acquisition of most of the pure-play BI/PM vendors.