Top 5 BI Predictions for (the Rest of) 2008

OK, so it’s February, and I’m late to the party (it got busy for a while), but here’s my belated thoughts on the top five BI trends this year. I’ll avoid the standard laundry-list of “BI 2.0” (or even BI 3.0, sigh) tech trends, and instead concentrate on some of the BI market and customer impacts.

1. The BI World Divides into Three

The BI market will now be split into three different types: “megavendors” (disclosure: ich arbeite jetzt für einen Mega-Vendor), “independents”, and “open source”.

  • The open source vendors are already in a separate-but-linked world from other BI vendors, and a new split will open up between the megavendors (SAP/Business Objects, Oracle/Hyperion, IBM/Cognos, Microsoft, and others who may enter, e.g. HP) and the remaining independents (SAS, Microstrategy, etc.). For example, this week, in response to customer requests, Gartner set up a special megavendor comparison session as part of their European BI Summit.
  • Each of the markets will be driven by different dynamics, and will compete only indirectly.
  • The megavendors will divide up most of the enterprise market, and try to extend further into the mid-market, and the independents will grab niches where they can (although in a growing market, there’s plenty of room for everybody to be successful)
  • The independents will struggle to get the attention they feel they deserve, and sales may suffer because of it — but not yet enough to overcome Dr. Goodnight’s and Mr. Saylor’s reluctance to join other megavendor stacks.
  • The megavendors will continue to reach into the pool of independents to extend their existing offers.

2. Technology Goes up Another Level of Abstraction

Remember the days when reporting, querying & OLAP were different products that came from different vendors? Humans hate complexity: as overlapping markets converge, expect to see simplification and clustering in order to keep up — e.g. products and purchasing decisions at the level of “Enterprise Information Management” or “BI Platform”, rather than separate decisions for data integration, data quality, etc.  Expect to see other vendors follow SAP’s lead on focusing on a smaller number of higher-level product bundles.

3. A Surge in Standardization

There aren’t many excuses left for organizations not to start standardizing / rationalizing their BI platform.

  • Market maturity means that there’s lots of BI floating around in organizations and enough money is being spent to make it onto the radar of corporate purchasing departments (Gartner just announced that BI is the #1 priority for CIOs this year, for the third year running, and the trend is accelerating).
  • Market consolidation has removed most of the fear, uncertainty and doubt that may have held back large organizations from choosing a single preferred vendor (If you have chosen SAP as your applications standard and you have a mix of Business Objects and Cognos, which way are you going to go?)
  • Technology acquisition has meant the market-leading platforms are able to cover enough of the diverse user needs for standardization to be feasible
  • The transition from vendors’ “old” to “new” platforms is now complete, with most customers on, or in the process of moving to, the new platforms, and no “legacy” features stopping them from increasing their deployments

4. An Increase in Innovation

This one’s more controversial, but I believe you get innovation when things get shaken up, and there’s been more of that in the last few months than there has in the last few years.

  • Mixing teams. Yes, the larger vendors will need to spend time integrating their purchases, but at the same time, there will be lots of innovation from bringing together teams and initiatives in new ways (e.g. what happens if you mashed up, say, Polestar and T-Rex?, or Cognos’ tools with IBM’s ManyEyes?)
  • Bigger ecosystems. Because of acquisitions at every level, technology that was niche last year will now be exposed to vastly increased audience of solution developers (e.g. Inxight’s text analytics technology).
  • Differentiate or die. Faced with the megavendors and standardization, the smaller vendors will have to differentiate even more to make the sale (either of their products to customers, or of their company to a megavendor).

5. BI Success

I think it will be a golden year for BI where it really counts: successfully implemented BI projects. The technology is mature–what has held back wider, more strategic deployments has been a lack of business awareness, especially from senior executives. This will now change and the benefits will apply to every aspect of the industry.

  • Vendors: I’ve already heard several stories of sales teams, used to dealing with say, “Senior BI Team Leaders”, being summoned to talk to the CIO to explain what the new market consolidation means in terms of opportunities for their organization.
  • Customers: BI and Performance Management will play an increasingly large role in the standard McKinsey / Bain / Accenture etc. management presentations, making it easier to get funding and executive support for projects.