![\"market-share-banner\"](\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2009\/08\/marketsharebanner.jpg?resize=690%2C300&ssl=1\" "\\"market-share-banner\\"")
<\/p>\n<\/p>\n
IDC recently released several reports on business analytics market shares, including business intelligence and performance management:<\/p>\n
You\u2019ll have to subscribe to IDC\u2019s excellent service<\/a> to get the full details, but if you look carefully through industry articles<\/a> and vendor samples of the reports<\/a> you can get many of the key figures and information about how IDC divides up the analytics market.<\/p>\n Here\u2019s my interpretation of the big picture trends:<\/p>\n 1. It\u2019s a race between Oracle and SAP.<\/strong> IDC divides the analytics market into three main areas, all roughly the same size (there is also a fourth area, Spatial Information Analytics, but this makes up only around 3% of the overall market)<\/p>\n Both Oracle and SAP are growing faster than the market average, implying consolidation around the market leaders (although some of the top growth figures came from some of the smaller vendors in the space).<\/p>\n 2. Oracle\u2019s lead is narrowing, with SAP is coming on strong\u2026<\/strong> Oracle leads the overall analytics market by IDC\u2019s definition, but Oracle\u2019s growth has slowed since last year, while SAP\u2019s has increased. Oracle is losing market share in its traditional area of strength (data warehousing platforms) where the #2 and #3 (IBM and Microsoft) both grew faster. SAP is growing faster than Oracle overall and in each of the three main areas.<\/p>\n 3. \u2026Particularly in FPSM<\/strong>. Thanks to the acquisition of Hyperion, Oracle has been the leader of what IDC calls the Financial Performance and Strategy Management Applications market (part of the analytic applications area) since 2006. But some key acquisitions by #2 SAP (including Pilot and Business Objects) have narrowed the gap considerably, and SAP experienced almost 3x Oracle\u2019s growth over the last year.<\/p>\n It\u2019s human nature to assume that any set of numbers is more trustworthy than simple rankings. But just how accurate are the numbers, really?<\/p>\n IDC puts a lot of effort into gathering and interpreting the market share figures, and takes a lot of care to allocate the total vendor revenues among the various markets in which they participate. Despite this, there are at least three reasons that the numbers they provide are necessarily inexact.<\/p>\n Overall, these are marginal concerns, and the overall rankings are probably correct, but I would love to see IDC provide estimates of margins of error directly within the reports, making it easier to know whether small differences are in fact important.<\/p>\n What do the market share numbers actually mean<\/em>? What do they imply? What action could or should be taken based on them?<\/p>\n Obviously the vendors and their shareholders care about who\u2019s selling the most (although even then share price typically depends more on profitability than overall revenue). But should anybody else?<\/p>\n Typically, a claim of having the top market share is used to imply that the products are the best ones available in the market (and that is why they are selling so well). But\u00a0is it true?<\/p>\n Well, yes, they probably are \u2013 but in the same way that the #1 in the music charts represents the \u201cbest music\u201d.<\/p>\n Just as the top-selling music has the broadest appeal, the leaders have the most broadly useful products. However, just as your own musical tastes might involve something more niche, it may be that a niche BI product or analytic application may be the best for any particular project (which is why there will always be small, focused vendors in the space).<\/p>\n However, the analytics choice most organizations have to make is akin to having to choose the music that will most appeal to all of the different employees in your organization, rather than the music you personally like best.\u00a0This means most organizations probably shouldn\u2019t choose niche products, because of the value of being able to combine information across different project silos, and because people need multiple different types of access to information.<\/p>\n For example, a sales manager may need a dashboard to track key sales metrics, an OLAP tool for budgeting, an analysis tool for investigating the sales pipeline, and some regular HR reports about team vacation planning. And she would like the data in these reports to be consistent from one usage to another, even when the data in the reports comes from multiple different systems and platforms.<\/p>\n Different products from different vendors may be the \u201cbest\u201d niche solutions for each of these needs, but forcing the sales manager to use four unrelated systems, and cope with the inevitable data differences between them, is unlikely to be the best real-life solution. And of course, it’s typically more expensive to deploy multiple solutions than different front ends from the same vendor.<\/p>\n It\u2019s also worth noting that the major vendors may also provide the best niche solutions in many cases, since they typically became major vendors by having the best products in the first place, or grew through the acquisition of other best-of-breed vendors.<\/p>\n So one reason that vendors emphasize market share is because it\u2019s at least somewhat correlated with product quality. Most organizations do a thorough evaluation of the tools available in the market before choosing, and the majority of transactions are extensions to existing deployments, so market share is in some ways the most extensive \u201ccustomer satisfaction survey\u201d you will ever see. And rather than just ticking boxes, companies and individuals actually have to back up these judgments with money and their reputation.<\/p>\n In addition, choosing a product from a larger vendor provides some tangible benefits above and beyond the quality of the products themselves:<\/p>\n There are certainly factors that could also argue in favor of smaller vendors. For example, they may be more responsive, since you represent a larger part of their business, or more innovative, since they have a smaller installed base to maintain, and a stronger incentive to innovate in order to be able to win deals against the bigger players. And they may be more open, with less incentive to tie you to additional products in the vendor\u2019s portfolio (but by the same token, they make be less integrated with the other tools that do you have).<\/p>\n On average, software markets typically consolidate around a small number of larger organizations, showing that in the long run the benefits of size outweigh the potential downsides. And the fact that purchasers don\u2019t want to take \u201crisks\u201d with smaller vendors and that this \u201cwinner takes all\u201d trend is firmly embedded in the consciousness of corporate buyers everywhere makes it even more of a self-fulfilling prophecy.<\/p>\n What does \u201cmarket leadership\u201d refer to? Is the \u201cleading\u201d product the one with the biggest market share? Or the highest quality? Or the the highest growth? Or some combination of the above?<\/p>\n Clearly, the term is open to interpretation, and vendors often spend considerable effort to find a marketable leadership claim \u2013 even to the extent of trying to tailor or invent market segments in which they are the leader (for example, Arbor software essentially invented the \u201cOLAP market\u201d as part of their marketing plans).<\/p>\n Despite much cynical eye-rolling from customers, it seems clear that these claims will always be part of the marketing landscape, since most of us do indeed want to be able to say we chose the \u201cbest\u201d or \u201cleading\u201d software for our organizations.<\/p>\n But SAP insists it is the #1 in the space<\/a>, based on its leading share of the analytic applications market, which includes financial planning and strategy management (IDC does not use the term EPM).<\/p>\n According to IDC\u2019s figure, Oracle is not #1 in business intelligence, and probably not in operational analytics (since SAP is leader in both applications and analytic applications). So what is the basis for the claim in the ad?<\/p>\n Oracle provides a link to a web page<\/a> that attempts to back up the assertion, and which doesn\u2019t mention market share at all. Instead, it links to reports from analyst companies like Forrester<\/a> and Gartner<\/a> that use more qualitative measures of \u201cleadership\u201d (interestingly, SAP could probably use the same list of reports to argue it was the overall leader).<\/p>\n Overall, market share is an important criteria that should not be ignored in purchase decisions. You can absolutely have great analytics projects with tools from smaller vendors. And successful analytics is much more about people and process than it is about technology, so in theory you can succeed with any tool.<\/p>\n But the whole point of analytics is that it must evolve over time, and adapt quickly to any changes in your business, and integrate with other systems inside and outside your organization, and I believe this gives the advantage to the larger vendors.<\/p>\n Among the larger vendors, does it matter which is #1 and #2? To SAP and Oracle, yes. For everybody else, it\u2019s just one factor to consider, along with functionality, fit with your architecture, and \u2013 of course \u2013 cost.<\/p>\n","protected":false},"excerpt":{"rendered":" IDC recently released several reports on business analytics market shares, including business intelligence and performance management. Should anybody other than the vendors care? Why?<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[204,213,445,501,588,722,793,807,817,880,911,950],"class_list":["post-12074","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-business-intelligence","tag-businessobjects","tag-epm","tag-fpsm","tag-idc","tag-market-share","tag-oracle","tag-performance-management","tag-pilot","tag-research","tag-sap","tag-sas"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p3X9RF-38K","_links":{"self":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts\/12074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/comments?post=12074"}],"version-history":[{"count":0,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts\/12074\/revisions"}],"wp:attachment":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/media?parent=12074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/categories?post=12074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/tags?post=12074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Are the Numbers Accurate?<\/h3>\n
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Does Top Market Share Mean that the Vendor has the Best Products?<\/h3>\n
Other Advantages of Market Share<\/strong><\/h3>\n
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Which Vendor is the Leader?<\/h3>\n
![\"Oracle-Hyperion-Ad\"](\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2009\/08\/oraclehyperionad.jpg?resize=304%2C284&ssl=1\" "\\"Oracle-Hyperion-Ad\\"")
<\/strong>For example, Oracle places ads such as the one on the right in magazines and airports around the world, claiming leadership in Enterprise Performance Management.<\/p>\nConclusion<\/h3>\n