Business Intelligence – Overview and Synopsis of Key Trends
Business Intelligence (“BI”) software represents the interconnected systems and tools that improve the strategic planning processes of enterprises and small to medium businesses (“SMBs”). While BI and business analytics are used interchangeably, what has been seen most frequently is that business analytics makes a subset of business intelligence. Over the past decade, the BI software industry has experienced tremendous growth, specifically through the number of products and services offered, the adoption of these technologies by verticals, and the declining cost of acquiring and storing vast amounts of data. While the core functions of BI such as information delivery, analysis, and integration remain the same, businesses now collect data at a more granular level and conduct sophisticated analyses and breakdown of said data. At the same time, vendors are more aggressive in deploying and experimenting with sophisticated data analysis techniques to drive strategic decisions and offer innovative and customized functionality for customers. From a financial institution examining transactions to a manufacturing facility analyzing procurement and shipments, it is hard to find a successful business that has not already leveraged BI software.
Gartner estimates that the BI software market reached $14.1 billion in 2013 and will reach $20.8 billion by 2018. Cloud-based BI, the fastest growing segment, is estimated to grow nearly four-fold from $0.75 billion in 2013 to $2.94 billion by 2018. Growth of traditional BI software such as SAP’s BusinessObjects BI and Oracle’s Hyperion BI is forecasted to grow low single-digit rates over the next few years. As customers shift from traditional, centralized, and department-specific BI systems to those that support analysis, prediction, forecasting and optimization across the whole organization, companies that are able to provide these features will be strategically valued by potential acquirers, investors, and customers. The previous wave of consolidation within the BI software industry not long ago including the largest pure-play, traditional BI vendors such as Cognos (IBM), Hyperion Solutions (Oracle), Business Objects (SAP) paved way for a new generation of BI software companies. As seen in several technology sectors, much of this innovation has been created by younger and niche companies, a trend that should drive consolidation in coming years.
Vendors are now embedding traditional reporting with interactive dashboards and advanced analytics with the intent to expand usage to mobile and nontraditional BI users. Companies are also leveraging new data types and implementing new types of analysis, such as location intelligence and analytics on multistructured data. As demand for advanced analytics solutions and the trend of data-as-a-service (“DaaS”) increasingly become significant growth drivers for the BI industry and its constituents, BI software has become the top ranked IT priority among enterprises and grown to become the fourth-largest application software segment in the world. The growing appetite for innovative features such as smart and interactive data discovery and prescriptive and formative analytics will be most in-demand for users. Additionally, at least a quarter of all new BI software deployments will be provided as SaaS/cloud services.
Analysts anticipate that enterprises utilizing BI platforms will purchase platforms that allow for strong and broad business-user accessibility and IT-driven enterprise for governance, data reuse, security, and scalability by 2015. I imagine that the gap to be filled in 2016 and beyond concerns governed data discovery, which addresses both business users’ requirements for easy usability and enterprises’ complex IT-driven requirements. Large BI vendors such as SAP, IBM, TIBCO, and Oracle will continue to dominate BI software market requirements in a crowded market, but smaller niche vendors that offer the ability to address a unique set of capabilities targeted at key buying requirements and to solve complexities introduced by multistructured data will be attractive targets for consolidation. Leaders of BI initiatives will be under much pressure to locate and solve these opportunities to deliver results.