Worldwide_Business_Intelligence_Tools2005VendorShares

8/8/2019 Worldwide_Business_Intelligence_Tools2005VendorShares

1/20

Filing Information: July 2006, IDC #202603, Volume: 1, Tab: Vendors

Analytics and Data Warehousing Software: Competitive Analysis

C O M P E T I T I V E A N A L Y S I S

W o r l d w i d e B u s i n e s s I n t e l l i g e n c e T o o l s 2 0 0 5 V e n d o r S h a r e s

Dan Vesset Brian McDonough

I D C O P I N I O N

IDC continues to see healthy demand for business intelligence (BI) tools. Although

there are signs of a shift in the competitive landscape, BI tools remain an attractive

market for software vendors and one of the top investment priorities for end-user

organizations. Market highlights include:

! An 11.5% growth rate was achieved in 2005 for a total market size of $5.7 billion

in worldwide software revenue.

! Broader adoption of BI software is expected to continue as more end users gain

access to query and reporting tools and as organizations embed BI software into

operational applications supporting all business processes.

! Interest in advanced analytics for forecasting, optimization, and other decision

support techniques is growing as organizations look to move beyond using BI

tools only for query and reporting.

GlobalHead

quarters:5SpeenStreetFramingham,

MA

01701USA

P.5

08.8

72.8

200

F.5

08.9

35.4

015

www.i

dc.com


2/20


3/20

2006 IDC #202603 1

I N T H I S S T U D Y

This IDC study examines the business intelligence (BI) tools market and vendor

shares for the period 20032005. Worldwide market sizing is provided for 2005, with

trends from 2003. Geographic and operating system splits for the overall market are

provided in addition to a vendor competitive analysis, with revenue and market share

for the leading vendors for 2005. This study also includes profiles of leading vendors

and identifies the characteristics that vendors will need to be successful in the future.

M e t h o d o l o g y

See the Learn More section for a description of the data collection and analysis

methodology employed in this study.

In addition, please note the following:

! The information contained in this study was derived from the IDC Software

Market Forecaster database as of May 26, 2006.

! All numbers in this document may not be exact due to rounding.

For more information on IDC's software definitions and methodology, see IDC's

Software Taxonomy, 2006(IDC #34863, February 2006).

B u s i n e s s I n t e l l i g e n c e M a r k e t D e f i n i t i o n

IDC defines the BI tools market as being composed of two market segments: query,

reporting, and analysis (QRA) and advanced analytics. A further segmentation by

software packaging divides the market into standalone and database-embedded BItools:

! End-user query, reporting, and analysis. Query, reporting, and analysis

software includes ad hoc query and multidimensional analysis tools as well as

dashboards and production reporting tools. Query and reporting tools are

designed specifically to support ad hoc data access and report building by either

IT or business users. This category does not include other application

development tools that may be used for building reports but are not specifically

designed for that purpose. Multidimensional analysis tools include both online

analytical processing (OLAP) servers and client-side analysis tools that provide a

data management environment used for modeling business problems and

analyzing business data. Packaged data marts, which are preconfigured softwarecombining data transformation, management, and access in a single package,

usually with business models, are also included in this functional market.

! Advanced analytics. Advanced analytics software includes data mining and

statistical software (previously called technical data analysis). It uses

technologies such as neural networks, rule induction, and clustering, among

others, to discover relationships in data and make predictions that are hidden,

not apparent, or too complex to be extracted using query, reporting, and


4/20

2 #202603 2006 IDC

multidimensional analysis software. This market also includes technical,

econometric, and other mathematics-specific software that provides libraries of

statistical algorithms and tests for analyzing data. Although statistics products

vary in sophistication, most provide base-level functions such as frequencies,

cross-tabulation, and chi square. This market also includes a specialized form of

statistical software focused on functional areas such as the industrial design of

experiments, clinical trial testing, exploratory data analysis, and high-volume and

real-time statistical analysis.

Business Intelligence Tools Taxonomy Update

In light of the recent changes in the business intelligence market, IDC has changed

the taxonomy by which it accounts for market sizing and vendor shares in the BI

software market. The following changes are reflected in the current BI market study:

! The packaged data mart market was merged into the end-user query, reporting,

and analysis market.

! The data mining and technical data analysis tools markets were merged to createthe new advanced analytics software market.

! Database-embedded BI server products such as OLAP, data mining, and

reporting servers are now accounted for in the BI tools market rather than the

data warehouse (DW) management tools market.

For full details on these taxonomy and methodology changes, see IDC's Worldwide

Business Intelligence Software Taxonomy, 2006(IDC #34994, March 2006).

S I T U A T I O N O V E R V I E W

T h e B u s i n e s s I n t e l l i g e n c e M a r k e t i n 2 0 0 5

In 2005, the BI market grew 11.5% to reach $5.7 billion in worldwide license and

maintenance revenue. As Table 1 shows, the database-embedded BI server market

experienced a higher growth rate (19.9%) than did standalone BI software (10.7%).

The query, reporting, and analysis market outgrew the advanced analytics market in

2005. We had anticipated a higher growth rate for advanced analytics. One of the

reasons for the lower-than-expected performance of this market segment was a

larger-than-expected shift in revenue to query, reporting, and analysis tools as well as

to packaged analytic applications by SAS, the largest advanced analytics tools

vendor.


5/20

2006 IDC #202603 3

T A B L E 1

W o r l d w i d e B u s i n e s s I n t e l l i g e n c e R e v e n u e b y S e g m e n t , 2 0 0 3 2 0 0 5 ( $ M )

2003 2004 2005

20032004

Growth (%)

20042005

Growth (%)

Standalone

Query, reporting, and analysis 3,298.8 3,618.2 4,023.0 9.7 11.2

Advanced analytics 971.6 1,062.6 1,157.4 9.4 8.9

Subtotal 4,270.4 4,680.8 5,180.4 9.6 10.7

Database embedded 287.5 462.4 554.4 60.9 19.9

Total 4,557.9 5,143.2 5,734.8 12.8 11.5

Source: IDC, July 2006

Performance by Geographic Region in 2005

Figure 1 shows the geographic breakdown of the BI market. The Americas region

continues to be the largest segment of the market, followed by Europe, the Middle

East, and Africa (EMEA) and Asia/Pacific. Further details and analysis of specific

regional and country-level trends and market shares are available from IDC.

F I G U R E 1

W o r l d w i d e B u s i n e s s I n t e l l i g e n c e T o o l s R e v e n u e S h a r e

b y R e g i o n , 2 0 0 5

Asia/Pacific

(11.3%)

EMEA (35.8%)

Americas (52.9%)

Total = $5.725B



6/20

4 #202603 2006 IDC

Performance by Operating Environment in 2005

Figure 2 shows the operating environment breakdown of the BI market. Windows

continues to dominate the market, followed by Unix and mainframe platforms.

Although Linux represents only a small fraction of the worldwide OS share of the BI

market, it is by far the fastest-growing platform. New open source BI initiatives are

likely to sustain or accelerate this trend.

F I G U R E 2

W o r l d w i d e B u s i n e s s I n t e l l i g e n c e T o o l s R e v e n u e S h a r e

b y O p e r a t i n g E n v i r o n m e n t , 2 0 0 5

Other (11.0%)Linux/other open

source (0.6%)

i5 and OS/400

(1.2%)

Mainframe

(12.1%)

Unix (20.6%)

Windows 32

and 64 (54.5%)

Total = $5.725B


P e r f o r m a n c e o f L e a d i n g V e n d o r s

Although the overall market continues to grow in the forecast range, the performance

of individual vendors varies widely. As in other steadily maturing markets, the share of

the top 10 BI vendors continues to increase from 57.9% in 2003 to 60.8% in 2004

to 62.3% in 2005. IDC continues to expect further consolidation also through mergers

and acquisitions. Table 2 shows the performance of leading BI vendors.


7/20

2006 IDC #202603 5

T A B L E 2

W o r l d w i d e B u s i n e s s I n t e l l i g e n c e R e v e n u e b y V e n d o r , 2 0 0 3 2 0 0 5

Revenue ($M) Share (%)

2003 2004 2005 2003 2004 2005

20032004

Growth (%)

20042005

Growth (%)

Business Objects 649.9 712.6 795.3 14.3 13.9 13.9 9.6 11.6

SAS Institute 473.4 514.5 582.4 10.4 10.0 10.2 8.7 13.2

Cognos 415.5 511.5 567.2 9.1 9.9 9.9 23.1 10.9

Microsoft 125.0 281.4 353.1 2.7 5.5 6.2 125.1 25.5

Hyperion Solutions 262.8 258.6 287.1 5.8 5.0 5.0 -1.6 11.0

Oracle 195.2 214.0 247.7 4.3 4.2 4.3 9.6 15.7

MicroStrategy 142.2 185.0 212.3 3.1 3.6 3.7 30.1 14.8

SAP AG 123.9 152.2 181.8 2.7 3.0 3.2 22.8 19.4

SPSS 140.9 158.5 176.2 3.1 3.1 3.1 12.5 11.2

Information Builders 112.0 140.0 170.0 2.5 2.7 3.0 25.0 21.4

IBM 163.4 131.2 139.1 3.6 2.6 2.4 -19.7 6.0

Actuate 88.6 88.6 89.9 1.9 1.7 1.6 0.0 1.5

Hummingbird 38.2 41.4 42.9 0.8 0.8 0.7 8.4 3.6

Visual Numerics 36.8 37.4 38.7 0.8 0.7 0.7 1.8 3.5

Fujitsu Ltd. 31.2 36.5 38.1 0.7 0.7 0.7 17.1 4.4

Lawson Software 31.0 31.0 35.0 0.7 0.6 0.6 0.0 12.9

CA 27.4 29.0 29.3 0.6 0.6 0.5 5.8 0.9

arcplan 20.0 22.0 23.7 0.4 0.4 0.4 10.0 7.7

QlikTech 7.2 12.9 22.1 0.2 0.3 0.4 79.1 71.7

ProClarity 13.0 17.7 21.5 0.3 0.3 0.4 36.2 21.5

Teradata (NCR) 16.3 18.4 20.6 0.4 0.4 0.4 13.0 12.0

Other 1,444.0 1,548.7 1,660.8 31.7 30.1 29.0 7.3 7.2

Total 4,557.9 5,143.2 5,734.8 100.0 100.0 100.0 12.8 11.5



8/20

6 #202603 2006 IDC

Business Objects

Business Objects ended 2005 again as the leading BI software vendor, with $795

million in BI tools revenue and a 14% market share. Business Objects is the dominant

query, reporting, and analysis vendor, with a broad user base spanning all major

geographic regions, company size segments, and industries. Building on this base,

the company has ambitious goals for growth. This growth can either be organic orinvolve further acquisitions. Both paths will likely contribute to Business Objects' top

line over the foreseeable future, with most of the organic growth coming from query,

reporting, and analysis tools from both expanding the company's user base within

enterprise accounts and deeper penetration of midsize organizations.

However, competitive pressures, especially from database vendors, suggest that

organic growth will not be sufficient to maintain even low double-digit growth rates for

software revenue, which would make another acquisition an attractive option for

Business Objects. Such an acquisition is unlikely to be in the company's existing

stronghold segment of query, reporting, and analysis but could instead involve adding

advanced analytics, search, business process management, or packaged analytic

applications products into its portfolio.

SAS Institute

SAS was the second-largest vendor in 2005, with $582 million in BI tools revenue and

a 10.2% market share. Fifty-nine percent of SAS' BI tools revenue comes from

advanced analytics software. However, in 2005 the company saw strong performance

from its Enterprise BI Server product suite, which resulted in a 26% growth in its

query, reporting, and analysis revenue (for more details see SAS Revamps Its BI

Software and Finds Traction Outside Its Core Competency of Data Mining and

Statistics, IDC #34846, February 2006).

SAS is also continuing to find success in specialty analytic applications that take

advantage of its advanced analytics tools. Examples include applications for various

types of forecasting, optimization, and descriptive and predictive analytics. Although

this revenue is not accounted for in the current BI tools study, it influences the

company's overall product mix and in aggregate has a tempering effect on BI tools

revenue.

In the short term, IDC does not see any serious challenge to SAS' dominance of the

advanced analytics market and expects the company to continue to experience

above-market growth rates for query, reporting, and analysis. However, at the same

time there is likely going to be a long-term, continuous shift toward more packaged

analytic applications.

Cognos

Cognos finished 2005 as the third-largest BI vendor, with $567 million in BI software

revenue and a 9.9% market share. Like its longtime rival Business Objects, Cognos

experienced competitive market pressures, which kept its query, reporting, and

analysis revenue growth rate below that of the market. IDC speculates that the

company's ReportNet product, which had tremendous growth when it was first


9/20

2006 IDC #202603 7

introduced at the end of 2003, encountered tough competition from the many

reporting products in the market from specialty BI and database vendors.

Although Cognos still derives a majority of its revenue from BI tools, the company

experienced a higher growth rate in its business performance management applications

than it did in BI tools. This trend is indicative of a steady shift toward a focus on analytic

applications. As the market for BI tools matures, Cognos is likely to continue to expand

on its strategy of both developing and acquiring packaged analytic applications in areas

such as workforce analytics (released in 2006), supply chain analytics, customer

analytics, and business performance management. This expected shift will put internal

pressure on BI tools. However, these trends take years to play out; in the meantime,

Cognos remains solidly one of the top BI tools software providers.

Microsoft

IDC estimates the value of Microsoft's BI tools at $353 million, which puts the

company into fourth place with a 6.2% market share. Among its closest competitors,

Microsoft is a relative newcomer to the BI tools market; the company introduced its

OLAP server at the end of 1997. Nevertheless, Microsoft has seen strong growth overthe past several years as it has expanded and enhanced its database-embedded BI

features and combined them with related tools such as data integration. Specifically,

the high growth rate in 2004 is attributed to the release of SQL Server Reporting

Services.

More recently, Microsoft acquired ProClarity. (The acquisition closed in 2006;

therefore, IDC has shown the two companies as separate entities in this 2005 market

share study.) This acquisition filled an important gap in Microsoft's BI software

portfolio. The company now has not only server-side BI engines for OLAP and data

mining but also a Web-based (as well as thick-client) end-user query, reporting, and

analysis tool.

Microsoft's impact on the BI tools market cannot be overemphasized. Currently this is

especially true with respect to its Reporting Services and Analysis Services products.

However, the company is also going to have an impact at the "front end" of BI in the

coming years. Note that although Microsoft Excel is not counted as a purpose-built BI

tool, Microsoft's recent focus on promoting Excel as a key interface for BI is also

going to have a negative impact on competition. Again, this impact will not create any

sudden material shifts in the market, but an evolutionary change has been put into

motion by the database vendors, and it will reshape the BI tools market over the next

15 years.

Hyperion Solutions

Hyperion recorded a strong year of BI tools sales with revenue of $287 million and a

5% market share. The growth was driven by the new Hyperion System 9, which in

essence was the first major release of a combined BI suite incorporating the best of

Hyperion and former Brio technologies. It's also interesting to note that Hyperion had

weaker-than-expected results in its financial and business performance management

(BPM) applications business lines. These two major revenue streams for Hyperion

seem to oscillate in performance as sales and marketing efforts shift from year to

year. Hyperion remains the largest financial and BPM analytic applications vendor,


10/20

8 #202603 2006 IDC

and over the long term, IDC expects Hyperion to experience higher growth rates in

this product line rather than in BI tools.

Oracle

Oracle's BI tools revenue in 2005 came in at $247.7 million, which increased its

market share to 4.3%. The company derives BI revenue from both database-embedded BI servers and end-user query, reporting, and analysis tools. There was a

clear increase in marketing emphasis on BI in 2005, and IDC expects Oracle to

continue above-market growth rates in BI tools as the current market cycle plays itself

out over the next 15 years. Having said that, Oracle has had other marketing pushes

into BI in the past, which did not necessarily result in expected sales execution. At

Oracle, its BI tools must compete not only with other vendors' products but also with

its own analytic applications and Daily Business Intelligence, a component of the

company's e-Business Suite (not accounted for in this study).

Oracle's market position in BI tools and analytic applications has been significantly

strengthened via its recent application company acquisitions. Oracle's March 2006

launch of a new line of three BI packages was especially newsworthy due to theprominent position of the Siebel Analytics technology (named Analytic Server) that is

included in certain bundles, reflecting not only the success of Siebel in analytics, but

also the value to Oracle of the federated query technology that underlies the Siebel

Analytics products. With its enhanced arsenal of BI technologies, the company set

direct aim at the independent BI companies that currently lead the BI market. (For

more details see Oracle, Armed with Acquired Ammunition, Reloads for Business

Intelligence, IDC #201036, March 2006 and Oracle + PeopleSoft + Siebel: What Does

the Combination Mean for BI, Analytics, and Performance Management? (IDC

#34382, November 2005.)

Comments on Other Selected Vendors

! MicroStrategy continues to deliver on a strong product suite, which remains an

attractive option for many large-scale BI deployments that benefit from its

underlying relational OLAP (ROLAP) infrastructure. Its reporting tool, general

user interface, and development functionality remain at the forefront of innovation

and usability. However, the company's phenomenal growth rates of the past few

years finally caught up with it, and the software growth rate halved to a still

respectable 15%.

! SAP's presence in the BI tools market is derived from tools related to its

NetWeaver platform that are primarily focused on the analytic server formerly

marketed as SAP BW. SAP is a significantly stronger player in packaged analytic

applications. However, the company's core applications business does require asupporting tools infrastructure, and increasingly, SAP does not want to relegate

that opportunity to competitors.

! SPSS is the second-largest advanced analytics vendor. Its focus on predictive

analytics paid off in 2004 and 2005 after several years of lower-than-market

growth rates. In many cases, SPSS has also been able to cross-sell its query,

reporting, and analysis tools into its base of advanced analytics customers.


11/20

2006 IDC #202603 9

! Information Builders Inc. (IBI) saw yet another shift in its product mix to

WebFocus from Focus, which accounts for the strong growth of its BI tools in

2005. After 30 years, IBI remains a viable player in the BI market, with new

products such as WebFocus ActiveReports, promising partnerships with GIS and

search vendors, and the synergy between its own BI and iWay data integration

business. IBI also remains one of the most scalable reporting environments on

the market.

! IBM saw a modest 6% increase in its BI revenue, reversing a negative growth

rate from the previous year. Like its major database competitors, IBM has

followed the path of embedding more BI functionality into its DB2 database. This

technology includes both multidimensional analysis through DB2 Cube Views

and data mining through DB2 Enterprise Miner. Cube Views, along with IBM

QMF and AlphaBlox, composes IBM's query, reporting, and analysis software. To

date, IBM has made an explicit choice not to enter the query, reporting, and

analysis market focused on business end users. The company has placed

primary emphasis on its BI, DW, and data integration platform. However, it's not

inconceivable that IBM will follow its database competitors and enter the

business end-user BI market with either BI tools or packaged analytic

applications. Given IBM's history, this shift would likely happen through

acquisitions.

! Actuate's software revenue has remained stable over the past two years as the

company expanded its product line from its core reporting software to more ad

hoc analysis tools. At the same time, Actuate continues to have a solid

embedded reporting business through the indirect channel both in the

commercial world and through its participation in the Eclipse Foundation.

! Lawson is one of the few enterprise applications vendors that also has a distinct

BI tools product line. The company markets its BI tools exclusively to its installed

based of applications customers. Because more users expect to see BI

functionality as part of their applications in an integrated workflow, Lawson is

capitalizing on this trend. Lawson's recent merger with Intentia has created an

even larger applications vendor with presence in both North America and

Western Europe. Because Lawson is claiming a 90% attach rate for selling its BI

suite with its new applications deals, IDC expects that after a certain period

opportunities will surface to expand Lawson's footprint in the BI tools market by

also targeting the former Intentia user base.

! QlikTech was the fastest growing of the top 20 BI tools vendors in 2005.

Although still of modest size with $22 million in software revenue, the company

grew over 70% in each of the past two years. QlikTech's expansion from its

European base into North America has been received well, and IDC expects

continued aggressive growth for the company in its chosen midmarket niche.

IDC's end-user research has shown that QlikTech's product, QlikView, is

attractive due to its ease of installation and ease of use. QlikView takes a very

different approach to data management (from all the other major BI vendors) by

providing what amounts to "infinite" dimensional ad hoc query and analysis to

end users something that traditional OLAP vendors cannot provide with their


12/20

10 #202603 2006 IDC

existing products. QlikTech recently also enhanced its reporting tool that enables

creation of production reports.

Beyond the top vendors whose shares are identified in Table 2, there are many BI

vendors whose combined revenue is aggregated under "other" vendors. These

software companies range in size, either provide niche products or focus on specific

geographic regions or industries, have different channel strategies, and target a range

of organizations from SMBs to large enterprises. Two examples of such vendors that

have made their mark in the BI market are Noetix and Celequest:

! Noetix traces its roots back to 1994. Over the years the company has

established a customer base of 1,300 organizations to which it provides BI tools

that are well positioned within the architecture of enterprise applications such as

Oracle e-Business Suite and Siebel. Although the company has an easy-to-use

dashboarding technology for end users, its primary value proposition comes from

the methods used to access and retrieve data from the enterprise applications in

order to support operational BI efforts. The mappings that Noetix has created to

these enterprise applications enable its customers to deploy the Noetix system

rapidly. As the underlying enterprise applications are modified, Noetix software is

able to automate many of the otherwise manual mapping requirements. This

automation lowers total cost of ownership and alleviates the pressure on already

resource-constrained IT departments.

! Celequest began in 2002 as a business activity monitoring vendor founded by

Diaz Nesamoney (cofounder of Informatica). Since then the company has

expanded its product suite to focus on operational BI through both data

integration and dashboarding tools. In addition, Celequest recently announced

the availability of LAVA, the industry's first BI appliance offering, which combines

Celequest's software with commodity hardware.

F U T U R E O U T L O O K

T h e N e x t W a v e o f B u s i n e s s I n t e l l i g e n c e

Just as security technology is something without which organizations can't survive, so

is BI technology something without which organizations can't succeed. However, BI

as a set of tools and concepts for managing organizational and individual

performance still has a long way to go in reaching all of the necessary people and

processes in companies, government agencies, hospitals, and universities.

IDC research into the BI market has identified that it moves in 15-year cycles. The

first of these periods, from 1975 to 1990, was characterized by production reporting

on mainframes. (Companies such as SAS, IBI, and IBM began in the BI market

during the early years of this cycle.) The second 15-year period, from 1990 to 2005,

saw the beginning of the "modern era" of BI, characterized by end userfriendlier

client/server-based BI tools from vendors such as Business Objects, Cognos, and

Hyperion. Eventually query, reporting, and OLAP technology migrated from

client/server to Web-based architecture with the development of broad suites of BI

platforms.


13/20

2006 IDC #202603 11

When we look back in a few years, we'll see that 2005 was another turning point in

the BI market and the beginning of the new wave of investment in BI by organizations

in all industries. The current market cycle is expect to last until 2020 and will be

focused on expanding the reach of BI to more users both inside and outside the

organization and a move to automate more decision processes by combining QRA

and advanced analytics functionality.

As the BI market is maturing, the focus of organizations, BI software vendors, and

systems integrators is changing. To date, the BI market has primarily focused on

delivery of information to analysts and managers. Progress has been made in

delivering information faster and through various means (e.g., reports, dashboards,

and alerts on PDAs). However, analysts and managers represent only a relatively

small portion of an organization, estimated at about 1520% of employees. In fact,

IDC believes that the market for reporting and OLAP tools for power users and

analysts has reached a level of maturity that cannot sustain the growth rates of the

past in terms of new license revenue. Instead, larger IT vendors such as Microsoft,

Oracle, and IBM along with the existing specialty BI vendors are now targeting this

market. As the market continues to mature, it is highly likely that the larger IT vendors

will continue to gain share.

But what about the rest of the organization? Whether we're talking about information

workers with higher levels of freedom to decide about their daily workflows and

processes or line-of-business employees who may be restricted by systems and

policies in how they perform their duties, a vast population exists whose business

intelligence requirements have not been met to their full potential.

The next wave of BI will reach out to these employees as well as other organizational

stakeholders such as suppliers, partners, customers, and government agencies to

improve information delivery and decision support functionality for all.

This shift in market focus can be only partially addressed through existing BI

software, which as already mentioned was created with the analyst or power user as

the intended audience. Clearly a frontline employee will have limited use for an OLAP

or an ad hoc query tool. In fact, to address the needs of frontline employees and line-

of-business managers, organizations must redefine and expand what they mean by

BI. The expanded vision of BI must take into account not only the technologies

involved but also business drivers and performance management methodologies.

Business Drivers for the Next Wave of BI

Compliance

BI can help drive consistency in decision making. It's important to make correctdecisions, but often it is also important that decisions are not made arbitrarily (i.e.,

that different employees followed similar decision processes, which can be audited or

monitored).

Competit ive Pressures

Within the process of performance management, it is important to go beyond simply

dashboards and reports that focus only on information delivery. To put BI into an


14/20

12 #202603 2006 IDC

operational context, it's not enough to have dashboards that simply report on what

happened. This information is valuable but of limited use. Dashboards should also

show context around the information and provide guidance for action. In other words,

they need to be in the context of whatever business process the dashboard is built for

and support predictive analytics.

Intercompany Connect iv ity

The final driver is intercompany connectivity, or the linking of business processes with

partners, suppliers, and customers. It is important in these cases to have a more

comprehensive view of operations that goes outside the organization.

The Changing Nature of BI Projects

At the same time, the discussion around BI implementations is changing from one of

technology to one of best practices in the process of performance management.

Some of the questions being asked include:

! What KPIs should be tracked, measured, and acted upon?

! How should BI competency centers be established and managed?

! How should master and metadata as part of broader data quality and compliance

effort be managed?

Other Key Emerging Trends

Avai labi l i ty and Scalabi l i ty

BI technology must evolve to address the needs of the ever-broadening audience of

users. As more data becomes available for analysis and more users expect to receive

decision support based on this data, the scalability and availability requirements of BI

systems are becoming more robust. IDC research shows that already today, over

40% of organizations indicated that if their BI systems go down for just a few hours,

there will be significant material impact on their operations. At this point, BI systems

have not yet reached the requirements of operational systems; however, the trending

is toward a convergence of availability requirements between analytics and

operational systems.

Tradit ional BI and Unstructured Content Access and Analysis

Another key emerging trend in the market is the convergence of traditional BI tools

and unstructured content access and analysis tools (including search technology). In

fact, it's quite likely that some of the emerging BI applications will closely resemble

common online community sites with the associated functionality for graphs, tables,search, comments, notes, ratings, and other collaborative community features. It is

also clear that search as a ubiquitous interface has the potential to penetrate many

more users than end-user BI tools, which historically have required more training. As

such, the search technology has the potential to displace traditional BI tools in certain

ad hoc analysis and information retrieval use cases.


15/20

2006 IDC #202603 13

Intel l igent Process Automation

Finally, BI will find its way to the vast majority of users by being embedded within the

operational applications already used by these end users. IDC calls this evolving

concept intelligent process automation (IPA). IPA is the convergence of BI and

business process management technologies. It is the automation of repeatable,

operational decisions (not the more infrequent strategic decisions made at theexecutive level). This is not to say that IPA replaces executive dashboards or ad hoc

BI solutions; the two technologies have different audiences and serve different needs.

However, only IPA can help automate repeatable, operational decisions to address

both performance management and compliance issues.

Impact of Open Source BI Tools

The last couple of years have shown the first signs that open source software is

creeping into the BI tools market. The focus here is not on traditional BI tools

deployed on open source operating environments, but instead truly open source BI

software. Vendors such as Pentaho, JasperSoft, and Actuate clearly display the first

signs of a potential market niche. However, we believe that the impact of open source

BI tools will be very limited over the next five years. During the latter part of the

current 15-year cycle of the BI market, open source software may develop into a

stronger competitive force. However, unlike in the operating systems or database

markets where open source technology addresses a vast mass market, the BI market

is not large enough or "generic" enough to support significant open source offerings in

the foreseeable future.

M a r k e t C o n t e x t

Vendor shares were last published for the business intelligence market in Worldwide

Business Intelligence 2004Vendor Shares (IDC #33564, June 2005). The differences

in the vendor shares shown in this study and that earlier study are due to taxonomyand methodology changes described in IDC's Worldwide Business Intelligence

Software Taxonomy, 2006(IDC #34994, March 2006).

E S S E N T I A L G U I D A N C E

E n d U s e r s

When you're developing your BI strategies, look not only at the traditional software for

query and reporting or at the decision support needs of power users. Instead, expand

your efforts to include features such as business process management, collaboration,

workflow, and annotations in addition to new scalability and availabilitycharacteristics.

S o f t w a r e V e n d o r s

As the BI market matures, it is bifurcating into large providers of standard query,

reporting, and analysis technology and specialty vendors whose tools and/or analytic

applications increasingly focus on narrower (industry- and/or business process


16/20

14 #202603 2006 IDC

specific) solutions. In the latter group, scale will increasingly matter. Perhaps the

market can sustain only four to five large-scale BI vendors. However, there is plenty

of room for specialists, and in fact there remains a great need for such specialists.

Not all of the top 20 vendors listed in this study will survive the next cycle in the BI

market as independent vendors. M&A activity is likely to continue and increasingly

bring together players from different but related disciplines such as search, business

process management, workflow management, collaboration, and portals.

S e r v i c e s V e n d o r s

IDC's Worldwide Business Analytics Services 20062010 Forecast (IDC #202492,

July 2006) exposes the services component around BI software and related business

analytics solutions. What is clear is that both large systems integrators (SIs) and

smaller specialty consultants are in a period of aggressive hiring into their BI/DW

practices. Technical and business consulting around BI or performance management

is an attractive opportunity. However, software vendors themselves are also looking

to tap into this market because some of them see their new license revenue growth

rates slow.

L E A R N M O R E

R e l a t e d R e s e a r c h

! Worldwide Business Analytics Services 20062010 Forecast(IDC #202492, July

2006)

! Business Analytics Appliances Are Here to Stay(IDC #202071, June 2006)

! Worldwide Business Intelligence Tools 20062010 Forecast(IDC #200973 April

2006)

! IDC's Worldwide Business Intelligence Software Taxonomy, 2006(IDC #34994,

March 2006)

! IDC's Software Taxonomy, 2006(IDC #34863, February 2006)

! Intelligent Process Automation: To Make Business Processes Intelligent Means

Making Business Intelligence Operational(IDC #34767, January 2006)

! Worldwide Business Intelligence 2004Vendor Shares (IDC #33564, June 2005)

A p p e n d i x A : B u s i n e s s I n t e l l i g e n c e M a r k e t

S e g m e n t V e n d o r S h a r e s

End-User Query, Reporting, and Analysis

Table 3 provides data for worldwide end-user QRA tools.


17/20

2006 IDC #202603 15

T A B L E 3

W o r l d w i d e E n d - U s e r Q u e r y / R e p o r t i n g / A n a l y s i s R e v e n u e b y V e n d o r , 2 0 0 3 2 0 0 5


2003 2004 2005 2003 2004 2005

20032004

Growth (%)

20042005

Growth (%)

Business Objects 649.9 712.6 795.3 18.3 17.7 17.6 9.6 11.6

Cognos 414.4 510.7 566.9 11.7 12.7 12.5 23.2 11.0

Microsoft 118.0 271.9 340.0 3.3 6.7 7.5 130.4 25.0

Hyperion Solutions 262.8 258.6 287.1 7.4 6.4 6.3 -1.6 11.0

SAS Institute 181.5 191.8 241.6 5.1 4.8 5.3 5.7 26.0

Oracle 181.4 197.1 227.7 5.1 4.9 5.0 8.7 15.5

MicroStrategy 142.2 185.0 212.3 4.0 4.6 4.7 30.1 14.8

SAP AG 123.9 152.2 181.8 3.5 3.8 4.0 22.8 19.4

Information Builders 112.0 140.0 170.0 3.2 3.5 3.8 25.0 21.4

IBM 149.9 115.2 121.9 4.2 2.9 2.7 -23.1 5.8

Actuate Corp. 88.6 88.6 89.9 2.5 2.2 2.0 0.0 1.5

Hummingbird 38.2 41.4 42.9 1.1 1.0 0.9 8.4 3.6

Lawson Software 31.0 31.0 35.0 0.9 0.8 0.8 0.0 12.9

Fujitsu Ltd. 25.6 30.2 31.7 0.7 0.7 0.7 18.1 4.9

CA 27.4 29.0 29.3 0.8 0.7 0.6 5.8 0.9

SPSS 27.0 28.1 24.7 0.8 0.7 0.5 4.1 -12.1

arcplan 20.0 22.0 23.7 0.6 0.5 0.5 10.0 7.7

QlikTech 7.2 12.9 22.1 0.2 0.3 0.5 79.1 71.7

ProClarity 13.0 17.7 21.5 0.4 0.4 0.5 36.2 21.5

Other 934.5 996.2 1,064.4 26.3 24.7 23.5 6.6 6.8

Total 3,548.5 4,032.3 4,529.7 100.0 100.0 100.0 13.6 12.3



18/20

16 #202603 2006 IDC

Advanced Analytics

Table 4 provides data for worldwide advanced analytics tools.

T A B L E 4

W o r l d w i d e A d v a n c e d A n a l y t i c s R e v e n u e b y V e n d o r , 2 0 0 3 2 0 0 5


2003 2004 2005 2003 2004 2005

20032004

Growth (%)

20042005

Growth (%)

SAS Institute 291.9 322.7 340.8 28.9 29.0 28.3 10.5 5.6

SPSS 113.9 130.4 151.5 11.3 11.7 12.6 14.5 16.2

Visual Numerics 36.8 37.4 38.7 3.6 3.4 3.2 1.8 3.5

Oracle 13.8 16.9 20.0 1.4 1.5 1.7 22.1 18.3

Teradata (NCR) 16.3 18.4 20.6 1.6 1.7 1.7 13.0 12.0

IBM 13.6 16.0 17.2 1.3 1.4 1.4 18.0 7.5

Insightful 13.8 14.5 16.0 1.4 1.3 1.3 5.1 10.3

Microsoft 7.0 9.5 13.1 0.7 0.9 1.1 36.3 37.9

Hitachi Ltd. 8.2 8.8 9.1 0.8 0.8 0.8 8.0 2.7

Fair Isaac 6.5 6.6 8.2 0.6 0.6 0.7 0.7 24.2

Silicon Graphics 10.1 9.1 7.2 1.0 0.8 0.6 -10.1 -20.3

Fujitsu Ltd. 5.6 6.2 6.4 0.5 0.6 0.5 12.4 2.1

Software AG 4.5 5.1 6.0 0.4 0.5 0.5 13.6 17.6

Unica Corp. 6.5 8.5 5.7 0.6 0.8 0.5 29.8 -33.0

ANGOSS Software 3.1 4.4 5.0 0.3 0.4 0.4 41.9 13.6

Other 457.8 496.3 539.5 45.4 44.7 44.8 8.4 8.7

Total 1,009.4 1,110.9 1,205.0 100.0 100.0 100.0 10.1 8.5



19/20

2006 IDC #202603 17

A p p e n d i x B : M e t h o d o l o g y

The IDC software market sizing and forecasts are presented in terms of "packaged

software revenue." IDC uses the termpackaged software to distinguish commercially

available software from "custom" software, not to imply that the software must be

shrink-wrapped or otherwise provided via physical media. Packaged software isprograms or codesets of any type commercially available through sale, lease, or

rental or as a service. Packaged software revenue typically includes fees for initial

and continued right-to-use packaged software licenses. These fees may include, as

part of the license contract, access to product support and/or other services that are

inseparable from the right-to-use license fee structure, or this support may be priced

separately. Upgrades may be included in the continuing right of use or may be priced

separately. All of the above are counted by IDC as packaged software revenue.

Packaged software revenue excludes service revenue derived from training,

consulting, and systems integration that is separate (or unbundled) from the right-to-

use license but includes the implicit value of software included in a service that offers

software functionality by a different pricing scheme. It is the total packaged softwarerevenue that is further allocated to markets, geographic areas, and operating

environments.

The market forecast and analysis methodology incorporates information from five

different but interrelated sources, as follows:

! Reported and observed trends and financial activity. This study incorporates

reported and observed trends and financial activity in 2005 as of the end of April

2006, including reported revenue data for public companies trading on North

American stock exchanges (CY 1Q054Q05 in nearly all cases).

! IDC's Software Census interviews. IDC interviews all significant market

participants to determine product revenue, revenue demographics, pricing, and

other relevant information.

! Product briefings, press releases, and other publicly available information.

IDC's software analysts around the world meet with hundreds of software

vendors each year. These briefings provide an opportunity to review current and

future business and product strategies, revenue, shipments, customer bases,

target markets, and other key product and competitive information.

! Vendor financial statements and related filings. Although many software

vendors are privately held and choose to limit financial disclosures, information

from publicly held companies provides a significant benchmark for assessing

informal market estimates from private companies. IDC also builds detailed

information related to private companies through in-depth analyst relationships

and maintains an extensive library of financial and corporate information focused

on the IT industry. We further maintain detailed revenue by product area models

on more than 1,000 worldwide vendors.


20/20

18 #202603 2006 IDC

! IDC demand-side research. This includes thousands of interviews with

business users of software solutions annually and provides a powerful fifth

perspective for assessing competitive performance and market dynamics. IDC's

user strategy databases offer a compelling and consistent time-series view of

industry trends and developments. Direct conversations with technology buyers

provide an invaluable complement to the broader survey-based results.

Ultimately, the data presented in this study represents IDC's best estimates based on

the above data sources as well as reported and observed activity by vendors and

further modeling of data that we believe to be true to fill in any information gaps.

C o p y r i g h t N o t i c e

This IDC research document was published as part of an IDC continuous intelligence

service, providing written research, analyst interactions, telebriefings, and

conferences. Visit www.idc.com to learn more about IDC subscription and consulting

services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please

contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or

[email protected] for information on applying the price of this document toward the

purchase of an IDC service or for information on additional copies or Web rights.

Copyright 2006 IDC. Reproduction is forbidden unless authorized. All rights reserved.

Published Under Services: Analytics and Data Warehousing Software; Business

Intelligence and Data Warehousing Strategies

Worldwide_Business_Intelligence_Tools2005VendorShares

Documents