Where is the Biggest BI Opportunity?

With so many companies and products talking about business intelligence and performance management these days, it's hard to differentiate the key target audiences and markets for which the tools and applications are aimed. And while it's possible to have mutliple uses of tools for many different types of issues and people, tools are generally made to solve a specific business problem or technology need.

In triangulating the results from a couple of reports just out from two leading analyst firms, we can get a fairly clear picture of the size of the BI market as it exists today by product type, year over year growth for these categories , and total % of the BI spend. Let's take a look at some of the key areas of growth and opportunity, with the disclaimer up front that as with most problems looking for a BI solution, your numbers may vary...

Biggest categories: There are three that are pretty close in size when you aggregate the numbers--BI tools (including query, reporting, and analysis), dashboards and scorecards, and planning, budgeting, and forecasting. All three are a +$1B market right now. Categories like analytic applictions and data infrastructure are north of $750M, and other categories are smaller.

Biggest growth: In the studies, the categories listed as those with the biggest growth, in order, where analytic applications, followed by dashboards and scorecards, then BI tools. Data infrastructure was almost flat, as was the planning category.

Biggest 2007 % spend: The BI tools category was the only category >25% growth. Dashboards were just under 25%, and data infrastructure and planning were in the high teens in terms of their growth rates.

So putting this infomation all together doesn't tell us a single product that will be the one to carry the day in the coming years, but does give some color in terms of where we might expect new products, new acquisitions, and new feature prioritization from the vendors. Again, this is only a snapshot, but a useful one given the detailed field level data collected by these two firms.

What jumps out: The flatlining of the planning and budgeting market, for one. With all the performance management acquisitions this year, one might expect that category to be growing like a weed. Instead it's less than 2% growth in these studies, although a solid 17% percent of the 2007 spend.

What this means: Not a lot of movement in terms of vendor replacements likely on the horizon. Companies may be satisfied with what they have, and may be spending money to upgrade their current implementation, but not to rip out and start all over. Which means a dogfight for bigger deals since they may be fewer and farther in between.

What else jumps out: Dashboards and scorecards continue to roll. For a category that is seemingly now a "commodity" and being relegated to the platform level feature set of some BI vendors, there sure does seem to be a good market for these products. It's the 2nd biggest slice of the BI market pie, has the 2nd highest growth rate (4.5%) next to analytic apps in the market, who are growing faster but on a smaller base; and has the 2nd biggest spend this year next to BI tools. Microsoft must be salivating at these facts--wonder how many companies are using SQL Server and looking for a front-end dashboard solution right now...

What this means: Look for new features and fuctionality from all the major vendors on this front in coming releases. Business Objects recently talked about an initiative with Accenture around Objectives Management, which is a role-based scorecard; Cognos continues to upgrade Metrics Manager, and even the on-demand guys are getting into the picture on this front, not to mention the boys up in Redmond. So all in all, great news for customers out there, there will be lots of options to choose from.

Other miscellanee-i: BI tools is still the king--biggest slice of the market, biggest spend this year. See previous post on standardization myths--I'd submit we're not near the mid-point of the BI revolution. There's a great market to make better sense of the information out there, and even as the big guys contract and merge, like every market, there are new and exciting offerings from companies like LucidEra, Pentaho, QlikTek, Adaptive Planning, and many others, that continue to fill in the gaps--Free markets win again!

Stay away from: Nothing really--no red flags in the studies, which is good news for our blog, and OK, the industry I guess if you want to be all magnanimous and all.