New Directions For BI Solutions in 2008
2008 is proving a confusing year for business intelligence solutions
market. Since the acquisition round in 2007 settled down, other
factors are entering the fray to further confuse the selection process
for the best BI solution for the clients needs:
With the 2007 acquisition of BI pure play vendors by SAP, Oracle
and IBM, the market is naturally confused as to what the mega vendors
are up to and how well they will integrate or lock down access to
analytical applications independent of ERP solutions.
The remainding pure-play BI vendors propose that they currently
offer better options to clients. Are these BI independents under-estimating
the strategic intent behind these acquisitions?
It is more likely that SAP, Oracle and IBM will leave the BI software
as stand alone but build deep integration between the newly acquired
BI solutions and their current ERP solutions within a proper architecture.
If so, this will benefit clients greatly.
The center of confusion for clients is with the many customers
that are currently using a combination of ERP and BI solutions that
are now competitors, for instance, they may be using SAP ERP with
Hyperion [now owned by Oracle] or using Oracle ERP with Business
The key will be for the ERP giants to provide solid assurance that
their BI solution will continue to get solid support as an independent
solution - and that includes continualy innovations and refinements
The key to this assurance by be in 'open frameworks'. This means
that whilst the ERP vendors strongly integrate their new BI solutions
with their current offerings they will simultaneously keep them
fully compatible with third party ERP packages. In turn, that depends
on the ERP vendors' support of open framework. The difficulty will
be in doing so whilst gaining the competitive advantage IBM, Oracle
or SAP have sought by acquiring their new charges.
Excluding clients from using their BI solutions with competitor
ERP applications will severely impact valuable revenue streams.
One other distinguishing element that may prove a greater differentiator
going forward is that each of the acquired BI solutions are strong
in different market verticals, for instance:
- Business Objects - is weak in the financial sector
- Hyperion - is strong in financial sector
Read more on industry
vertical BI solutions
The key to extracting full value from a BI solution is in feeding
it clean, current and valid data. Previously, BI solutions did not
focus on the data element, leaving that area of expertise to other
market segment providers. The new partnerships will strengthen this
area - Cognos implementation methodologies do not have the competency
to do data cleansing, but new owner IBM will effectively provide
a good data solution in house.
That means that IBM's acquisition of Cognos makes Cognos a far
The same applies to Hyperion and BusinessObjects.
As more enterprises are seeking the benefits of Software as a Service
[SaaS] solutions to beat the high cost of inhouse application infrastructures
and licensing fees, cloud computing is appearing on the radar of
many BI application seekers.
Cloud-computing is roughly a Platform as a Service, giving enterprises
a little more control and security over their data that a shared,
multi-tenant SaaS model. If a business is already using an SaaS
application such as CRM, then their data already being outside the
corporate walls makes BI cloud computing models more feasible.
This is especially so for operational BI tools such as query and
reporting. Analytical BI is not so easily digested by IT in a cloud
computing arena. This is the core competitive IP that will often
be the pivot point of success for many enterprises. Letting go of
such as asset outside the corporate walls is a big ask for many
IT security staff. My contention is that most corporates host their
own servers and data in a data center any - often the same one that
the SaaS or Cloud computing service is hosted in, so whats the difference!
Overcome the psychological barrier and the cloud-computing model
for BI could become a future model contender.
For BI vendors, the only true differentiation domain appears to
be in the embedded industry knowledge each of their BI solutions
encapsulates. Certain vendors have in-depth IP on certain industry
verticals, and have integrated this knowledge into the data models
and processes their BI solutions operate with.
Software Licence Models
As the economics of SaaS and Cloud computing are realised by more
businesses, the traditional high cost of front end licence models
is coming under attack.
Microsoft has already recognised this and already offers a model
that allows businesses to rent functionality they need from a service
provider, forgoing the capital expenditure normally associated with
Other vendors are facing the same demand from the market, but are
also facing resistance from application resellers, who see the disappearance
of large commission bundles adversely impacting their ability to
attract and retain top sales personnel.
Its just a matter of waiting for reality to filter down the market
Those who do embrace the new model early, will likely reap benefits
as yet undiscovered through these new commerce models.
Business intelligence applications are currently at the mercy of
ERP system vendors. It can be expected that Oracle, SAP and IBM
will tighten integration between their ERP applications and their
new BI solutions, but the road for clients currently using a combination
of vendors to meet their ERP/BI needs is uncertain.
Operational BI tools are likely to commoditise and move into SaaS
and cloud computing environments, with analytical BI remaining in-house
until more confidence is gained in retaining security around the
IP their data contains.
New commercial models for BI solutions, along with many other corporate
applications is evolving from high up front cost models to month
by month models, independent of per seat charges.
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BI Solution Index | Market
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On Demand | BusinessObjects | Cognos
8 BI | IBM | Information
Builders | MS PerformancePoint
| MS Sharepoint | Microstrategy
| Oracle BI | SAP
BI | SAS |
Teradata | BI Virtual Appliances
| BI Vendor Updates | 2008