Lucid Predictions for BI in 2008 and Beyond

December means holiday sales, all you can eat football, any excuse for a holiday party, and operating plan reviews. Often this includes a look back at the year and a look ahead. Our good friends at LucidEra added their good cheer and prognostication to the BI market with a press release and blog on what is ahead for BI in 2008. According to team Lucid:

1. SaaS BI will gain market traction. (We assumed this based on Lucid's funding round this year)
2. Innovation will be led by smaller vendors (Hmmm)
3. There will be a shift away from tools to pre-built apps (may not be great for Lucid)
4. Applications that integrate data and improve processes across transactional systems will drive the next wave of SaaS (they are on to something here)
5. A new breed of BI channel partner will emerge (or old partners breed new services and offers)

Full credit to LucidEra for having a point of view and sharing it via multiple channels. I would not be surprised to find they are growing, especially via their Salesforce relationship and focus on applications tied to revenue visibility. Every CEO wants to know, "where is my deal?" so this makes all the sense in the world.

However, if prediction 3 is right, it does not bode well for Lucid and small fry. Now that Cognos, Hyperion and Business Objects have all moved their BI platforms and applications to the P/L statements of larger applications providers, the law of the jungle suggests that unless the small guys deliver a discontinuous innovation with high barrier to entry, the large full stack applications vendors will win early and often.

An entertaining rebuttal to the Lucid top 5 was posted by Seth Grimes in his weblog with Intelligent Enterprise. Seth gives Ken Rudin credit for insight, followed by suggesting that his top 5 list was "mighty solipsistic". Ouch. Like Dennis Miller ouch. (Yeah, I didn't either so I looked it up with my friend Merriam.) Not sure this makes Ken Rudin out to be Bill Parcells, but maybe it explains why LucidEra lists itself in their own customer list. Got to say, I don't think I have seen that one before.

Seth then adds his own list of BI prognostications for 2008:

6. Ever increasing attention to data quality
7. BI integration of streaming and text-extracted data.
8. Location intelligence.
9. Collaborative analytics.
10. Advances in natural-language query and question-answering capabilities, which will all the same remain far from mature.
11. The start of attention to data provenance, reliability, and uncertainty

Generally not bad additions, but I don't know that I buy the idea that data quality is any more important next year than it has been over the last 10. Since Seth points out that his list is not exhaustive, I would like to add a couple highlights not covered in either of the above lists.

12. The intersection of business process with business intelligence and performance management. Gartner suggested in their last BI MQ that combining BI with process management was likely to happen this year. It did with Tibco buying Spotfire as we noted here. Both Forrester and Gartner indicate this is a no-brainer, and Ken's item #4 starts to point this direction, but this is by no means limited to SaaS and is much more about process than data.

It is only a matter of time because process management as a market is projected to be a $6B stand alone market by 2010 by IDC, and it is growing at about 25% CAGR. Looks pretty sexy next to the BI growth numbers, however the BI guys don't have a good solution. Oracle has some notion of integration-centric process management, Business Objects has no actual process management capability but SAP is heading in this direction via Netweaver, Cognos relationship with Lombardi is dead, and SAS appears to be doing barney partnerships with a couple vendors while they try to figure it out. It is coming. Write it down.

13. Open source BI is big and getting bigger. See also JasperSoft and Pentaho. What don't you get about free?

14. Simplicity and ease of use. Somebody commented on this in a response to Seth's blog and is right on point. Why can't my BI portal be as sexy as my fantasy football dashboard and reports? It remains my contention that if everyone could customize their applications, dashboards and reports with everything from their favorite sports team to their Second Life avatar, BI usage would skyrocket.

15. Predictive analytics. This crosses into the process management world as well as complex data mining and modeling. Business Objects just announced a partnership with SPSS as we noted here. If predictive analytics can continue to be simplified and broadly available, things will get interesting.

It seems we could discuss further the intersection of the BI and performance management, but rationalization of overlap in the portfolios of the big vendors will happen naturally over time.

Here's to an exciting 2008!