The Need for Lower Cost Business Intelligence

I’m stealing shamelessly from Darren Cunningham in his reference to Colin White’s latest posting on the B-Eye Network (linked over on the right hand side on this page), but hope that I would have run across this article as well, since it’s incredibly timely in terms of the issues being discussed not just on this blog, but amongst analysts, the market, and customers right now.

Colin’s a great source for new ideas and trends he’s seeing in the BI marketplace, and while not breaking any new ground with his assertion that the traditional BI vendors need to watch out for new and disruptive technologies and vendors, it’s instructive to see where he thinks this cost disruption might occur. Here’s my take on what we’re seeing today:

It is coming in technology. New innovations are occurring every day, and processes and data that once were disparate and unconnected are increasingly being cobbled together (at least on the front end) that enable accelerated analysis by end users. The BI vendors are starting to understand that getting beyond their traditional 15% penetration will not come in more features within the same product, but through the ability to work cross products in the manner in which people conduct their daily routines. And technology can lead this charge.

It is coming through new business and pricing models. Colin mentions Microsoft as an example, and it’s true, in areas like performance management, it’s not assured that you need to spend $500k on something that might get you 80% of the way there at a fraction of the cost. But it’s not just MSFT—open source, SaaS and pay-as-you-go, subscriptions—all these business models challenge the norm of the marketplace today and turn traditional licensing models on their heads.

It is coming through new vendors. Ever since I first used Google analytics to power a website, I’ve thought they had the potential to be the BI leader. They already have all the public information catalogued in their search engines; add that to Google desktop, and you’ve probably got the makings of a great BI tool right there. But non-traditional vendors (i.e. not the pure plays, not ERP, etc.) that want in on the potential market opportunity have a great shot at providing the most disruption to the market as it stands today, primarily due to their size and scope. While it may stand that a small vendor with a new business model might catch on fire, it’s just as, if not more likely that some like a Google decides this is a market they can make money on and they come in and start to make havoc.

No matter where you look, it’s definitely coming. It will be interesting to see if the impact continues to be at the fringes of the main BI market, or if one someone or something gets right in the middle of things and changes the mainstream. The coast is clear thus far--all the established leaders are doing well. But it doesn’t take much for things to change, and we’ll be keeping on the front lines of reporting what we see and when we see it.