The Big "O"

News of Oracle Corp's share drop echoed around the software market today as Oracle shares fell 7 percent Thursday March 27. Questions again arise around whether or not the shopping spree the company has been on in the past few years is paying off, Oracle has spent over $35 billion over the past three years on acquisitions. It’s been unique to watch Oracle’s aggressive moves particularly in the BI space with the acquisition of Hyperion, there have always been rumors around whether they will actually be able to successfully pull off their acquisition strategy. Oracle points to some of this downturn to be reflected by the US economic situation and overall market dynamics as many companies are being forced to pull back on their IT spend and investment in new technologies. It will be interesting to monitor this term as Oracle fourth quarter guidance for the is being set cautiously. The macro economic environment will hurt companies like Oracle more than smaller software vendors, giving a fighting chance to smaller players to come up with that next big thing and does open up the door for rival ERP software vendor SAP to gain some momentum particularly in the BI space.

Corporate Help for Planet Earth

Watch the following video to get a glimpse at what large corporations can do to help with environmental concerns. Watch video

The video speaks to how environmental efficiences not only save the companies bottom line but are doing something good for the environment. The Green question of the day is how can Business Intelligence help organizations get better insight that will enable these environmental best practices... Watch for more on this topic and the relevant customer case studies that tell the tale.

Check out the green section of the Cognos newsletter to learn more about their Green BI. http://www.cognos.com/newsletter/green/

Press Release Performance Management - Can We Get a Little Clarity

Ok, so I am overdue to get my blog on after a recent long vacation. Thinking that I needed to get up to date with everything in BI and performance management I did a quick surf of a number of websites to get up to speed with recent events - and found a couple of press releases that could use a strong dose of improved performance. So about Clarity Systems.

On March 5, Clarity Systems announced that they had an airline vertical market and that it is taking off. They went on to announce that JetBlue, Eos, British Airways, and "other" regional and international airlines have selected Clarity 6. This is great news for Clarity, except on the messaging and press release front.

It is great to know the vertical is taking off. Might be good to tell the other internal folks at Clarity, as the press release appears to be the only mention of the new vertical on the whole website. Airline does not even get a call out under "other industries" in the web navigation either under solutions or partners. Note to Clarity for sake of clarity, it is a vertical or not?

In the same manner, are you a leader or not? Clarity indicates they are a leader in performance management - the press releases all say so. This includes the press release where they announce they are visionary, not a leader in the most recent Gartner Magic Quadrant for CPM. As if this is not bad enough, take a look at the quote from Clarity's president Mark Nashman:

“We believe Gartner's report acknowledges our software for its openness, flexibility and depth of functionality in all areas of CPM,” says Mark Nashman, President, Clarity Systems. “In my opinion, it distinguishes Clarity Systems as a thought leader and innovator in the CPM market.”

Ok, I got it. And it other news, Mark's mom thinks he is a wonderful son and could not have committed the crime. Seriously. Seriously? While we all know it can be painful to run the Gartner gauntlet to get a release approved when mentioned in a report, at least they are clear about the rules of engagement. (In contrast to Forrester, which is a whole other post). I guess it never occurred to me that I could have just inserted the words "In my opinion" somewhere in the quote section to indicate this was the actual opinion of the person who is being quoted.

So actually, when Clarity says leader, they mean thought leader. I got it. Ooops, I read the rest of the release. It goes on to quote Nashman at the end of the release:

"We believe Gartner's Magic Quadrant for CPM Suites recognizes what our customers already understand: Clarity delivers visionary CPM solutions to the market.”

So the Gartner quad actually represents what their customers think, that they are a visionary, not a leader. This is helpful and actually explains that their vision is to have an airline vertical, but it is not actually generally available today. We think we are leaders, but our customers don't think so.

This would help explain where the other airline customers might have gone. In the release on their visionary airline vertical, the other airlines are never actually mentioned. Jetblue, Eos, and British Airlines have cleared customs and boarded the release, but the other airlines apparently got caught in a security screening. They did not board. Not in the headline, not in the body of the release. So what is there to prove they actually exist? Who writes this stuff? Who approves this stuff? Seriously. The visionary leader release has Dilbert written all over it. The airline one is a thing unto itself.

Color me dazed and confused. And I am sure it is not only me.

BI Chasm Crossed?

If you were around in the early days of BI you likely heard term "Crossing the Chasm." The term, was actually the title of a well known marketing book by Geoffery Moore, which was labeled the bible for bringing cutting-edge products to progressively larger markets. The pure play BI vendors have almost all gone the way of the dinosaur from their hay day almost ten years ago. There were dosens of BI vendors all fighting to be the first to cross the theoretical chasm, vendors like Crystal Decisions, Actuate, Cognos, Business Objects, and MicroStrategy, some those companies are still around, check out a longer list here, be careful this could bring back some memories.

So where are we now in the road to cross that invisible BI chasm? Some might say that for companies like Business Objects, Cognos, Hyperion, the chasm has already been crossed or rather moved to a much larger software category chasm in different area of the epistical landscape. Are there a new breed of software technologies that are on the forefront of a new BI chasm? One could certainly make the case for this when thinking about the movement with on-premise BI and a company like Lucid Era. Or potentially swinging to the other side of the spectrum and looking at a company like Pentaho and how Open Source technology will play a role in the future of BI. And how about a technology like search, something tells me that there are still a few notes to be played by mega vendors (including Google) when it comes to joining BI, simplicity, and search.

Not to knock the master but from a critical point of few Moore places a large emphasis on being the first to cross the chasm, but as we have seen thus far being a later mover in a given technology market may also be advantageous. Although much is still to be determined, you could look at the larger players like Microsoft, SAP, and Oracle as examples of vendors who moved into the BI market late in the game and are achieving success.

So is it about innovation or capitalization? And at the end of the day does it really matter? It certainly matters to the customer and to the overall growth and profitability of their businesses. Analysts have often commented on the how the evolution of the BI market has not progressed as they had envisioned and that the pure plays didn’t focus enough on innovation but rather took a buy approach. Does this lack of attention to innovation impact the end game or are innovative BI features simply rolled into a part of a greater offering that is at the end of the day sold for less and has the ability to reach a greater audience?

We are now at a place in time where the leading analyst firm calls out the 7 leaders in the market, the most in the history of the space. Organizations are saturated with BI tools and overlapping functionality, the mega vendors are coming to the game with cheaper more affordable offerings to drive BI into new places in the market where it has not been sold before. In addition to this BI functionality is being driven into applications and platform technologies and simply given away, where 5-10 years ago it was sold at a premium. My question is, what is the next chasm for BI to cross, will there even be one? There has been a lot of commentary about the removal of the BI Gartner quadrant, why even have one when there are only four or five major players?

It’s sometimes interesting to take examples from other technologies and get a sense for their journey to cross the chasm. Take the example of the new Blu Ray technology, Blu Ray is the next upcoming technology to challenge high definition DVD market and has recently taken a major step forward. A recent announcement that Toshiba will no longer develop, make or market high-definition HD DVD players is a major turn in the market. It’s somewhat similar to the technology transition that occurred with VHS and Beta, remember that thing! Blu Ray is on the promising track to the be the next in line, one way to think of the history is VHS…DVD…Blu Ray. Read more about the Toshiba announcement here.

Whatever the next step in is for BI, it certainly has been an interesting ride thus far and continues to drive towards solving business challenges and delivering insight and value to organizations around the world. Thanks for taking the time to read my chasm thoughts.

Cheers,
Nic

THERE We Go...

FINALLY the Business Objects Gartner press release makes its appearance.

Given the multitude of changes going on internally right now in the BI and performance management structure (one look at the new management team line-up shows Marge Breya out of marketing and in Juliette Sultan's old job heading up BI, Mark Doll out of the EPM GM role (and back to E&Y), a new marketing lead (from Pilot Software via SAP), and Greg Wolfe back in charge of the Americas), one can imagine that folks may be just a bit distracted. However, and not to dig too far into the weeds, some folks that were "clickable" are not on the front page, but if you click on John Schwarz link, you see all the old BOBJ management team in their old roles (including Marge, Mark, and Greg). Helloooo webmaster!

But that Philip Smeed video is AWESOME--a thousand cocktails to you sir!

Putting the Truthiness in BI

Ok nation, time for a fact check - or at least a little dose of reality for the BI truthiness that seems to have invaded the performance guys blog from somewhere in the pacific northwest. First we had seals being broken, followed by puppies, and can kicking. At this rate, it will not be surprising to find an Eddie Murphy Boomerang reference and a free year of Cat Fancy when you download your trial of Performance Point Server via a special performance guys offer. Give me a big old break.

First, the facts:

Gartner finally just released their new Magic Quadrant for Business Intelligence. Have a look at the report here.

One of the news stories covering the release leads with MSFT's strong position in ability to execute. You can read the article, or check Guy's breathless rehash here.

Nic invariabily lets the proverbial dogs out here.

Steven Colbert popularized the word truthiness when he launched his show in 2005. It was later named the world of the year and the wikipedia definition reads, "a satirical term to describe things that a person claims to know intuitively or "from the gut" without regard to evidence, logic, intellectual examination, or facts."

While their are some facts here, much like Nic's puppy surprise (where did that even come from), there is also a little more to the story. And isn't this supposed to be a BI blog?

I think Doug Henschen is on target in his review in Intelligent Enterprise, that none of the vendors really stand out - and that Gartner played it safe. The top vendors - SAS, Oracle, Business Objects, Cognos, Microsoft - are in one long continuum and Doug nets out that he thinks they all have a ways to go before they get to the top right in the MQ. Sounds about right.

Microsoft gets full credit (some would argue much more credit than they deserve based on their position) for having a strong set of products, large and active ISV channel and strong product quality. They also have a cost advantage for many organizations - especially critical for the SMB market. What is interesting is that there is no mention of MSFT being the BI standard in any account, a point raised for vendors like Cognos and Business Objects. How can you be an execution leader with no tier one enterprise standard deployments? I am not saying they don't exist, I just have not seen them.

Also interesting to note that MSFT gets dinged for being late to the BI party and Gartner notes that according to customers they lag behind in "metadata management, reporting, and dashboard and ad hoc query capabilities." In other words the bread and butter of BI is not as good as the other leaders. Sounds like the litter needs to grow up a little more, something that is widely expected.

As for the other leaders:

Cognos gets point for enterprise deployments and benefits of the version 8 architecture and positive perspective impact of IBM capabilities when the acquisition is completed. They get called out for lack of performance management and predictive capabilities as well as product overlap.

Business Objects scores with strong core BI and platform standard customers as well as SaaS leadership in category. However they get docked points for XI upgrade and migration headaches and get called on the carpet for having the least effective support of any major vendor. Ouch. Both of these have been points of pain for some time and this obviously had a negative impact to their position.

Oracle gets well deserved credit for having a strong enterprise offering, even if the name, OBIEE, leaves more than a little to be desired. Among the cautions are the uptake by Hyperion BI users (surprise) and long integration cycles with multiple BI products and offerings that will occupy Oracle and customers throughout 2008.

SAS rounds out the leadership pack with pronounced breath and depth of analytics that go well beyond the traditional BI requirements. However, as per usual, they lose points for being hard to use, lacking some key features and not even being the BI standard in many places where they are well entrenched for analytics and predictive analysis.

Note that Microstrategy and even Information Builders (on the line), are leaders in this quad, but they are not generally in the same class as those noted above.

Congratulation to all the leader's in this years Gartner Magic Quadrant for BI. It should be an interesting year with new products, new integrations, new market strategies. Let's hope for a little more fact based reality and a little less truthiness. And as Guy notes, where is the BOBJ press release?

More from Cognos - So About The Product

Picking up and closing off from yesterday, let’s talk product for Cognos 8v3. The demo portion of the event was led by Cognos VP of Product Marketing, Leah MacMillan. MacMillan started by quoting a recent Accenture study indicating the up to 2 hours a week is wasted looking for information, most organizations information is wrong half the time and that people admitted they used the wrong information at least once a week. Interesting, sounds like they need BI, specifically Cognos 8v3 to storm the information castle.

MacMillan then did a very credible job in calling out key issues for different classes of users and new features in Cognos 8v3 to address those points of pain. Among the key highlights for the CEOs include briefing books and the demo included Indigo Montoya’s briefing book displayed in PDF format. It was not clear what time frame and metrics where measured for Mr. Montoya’s quest. Also new capabilities for the portal, portlets and metrics management.

Cognos mobile was also highlighted for business line managers as well as new additions to the planning capability and multi-tabs displays for their dashboards. While hard to show the capabilities of how you can change a spreadsheet and the plan, the planning element of the demo did showcase integration with MSFT PowerPoint.

Those important non-BI users called employees were also called out with new capabilities focused on author once, publish many times. Other details mentioned include integration with leading enterprise search capabilities including Google One Box, MSFT Express 2008 and other vendors, as well as enhanced personalized alerts. This includes the ability to right click and add alert conditions.

MacMillan finished with mention of additional capabilities required for customers, partners and suppliers and well as hard core BI professionals and indicated she did not have time to review but teams were prepared to demo and spend time. She noted there were additional benefits for these groups of users. However the likelihood is that the focus on administration is among the highlights for both camps. The BI administrators get more capability to manage from the portal, which in turn helps them manage users outside the firewall.

The demo section was then followed by a quick Q&A Chad Erman from Southwestern Energy. Suffice it to say that Erman is a fan of the company and technology, noting in his responses that Cognos is a company “that just gets it”, and that they are so good they are nearly mind-readers. However he is very credible on stage and should be a strong reference to Cognos for the foreseeable future.

The demo and the presentation were both handled very professionally. Ms. MacMillan is very credible on stage and showcasing the product. The key themes around the event – the evolution of performance management and performance management in the real world were both delivered on in the presentation. Cognos deserves high marks for the event and their presentation and new capabilities.

However, as one might expect from a point release, this is not a game changer, and I am not sure that Cognos meets their suggested bar around innovation. The concept of BI on a Blackberry, re-usable portal widgets, portal based administration and multi-tab dashboards are not exactly new or innovative. However, they are all very useful capabilities that should be high on the enhancement request lists of existing customers and are likely to have immediate uptake. This is a straight upgrade for customers on Cognos 8v2. This is not necessarily a straight upgrade from earlier versions, so your results may vary. Look for Cognos 8v3 from your local sales rep as it is available now and have fun storming the castle.

Still More BI Predictions

So just when you thought it was safe to get on with business because we have so completely and thoroughly covered BI in 2008 via multiple predictions as noted here, along comes yet more BI predictions from Oco. I guess that gives us a total of 20 predictions on BI in 2008 (at least that we know of). The Oco 5:

- BI goes diagonal. In 2008, we will see the era of vertical and horizontal BI solutions converging toward diagonal solutions -- those focused on specific business problems extending across similar industries. (Huh?!? I am not sure I even know where to start with this one)
- BI Best Practices...customers will insist on best practices to measure and improve their performance. (I would file this one under the Seth Grimes obvious category. In other news, data quality is important and A-Rod is well paid)
- Technology will move from an IT priority to a business decision. Business users will decide what type of technology, what business model, and even which vendor. (Not only are these mutually exclusive, but anyone who ever took a project in front of a purchase committee knows this is self evident. )
- Growth of the IT Light Solution Model. Forward looking organizations are looking at projects more strategically and selecting business models to move faster. (There is more here but it doubles back on business model, vendor and some reference to IT off shoring)
- BI adoption rate expands into small and medium-sized organizations. BI will become more mainstream in 2008 with adoption in the mid-market. (I am having a hard time with this one for a variety of reasons including BI for the mid-market is such an old idea, small companies like Microsoft spend a lot of time here, say it with me "open source", and the sentence makes no sense.)

Generally, I would like to give credit for having a point of view and sharing it with the market. However, when you apply the Jim Rome rule, "Have a take, don't suck", this clearly does not meet the standard. It looks like the Oco guys saw competitor LucidEra's top 5 and shifted into action mode. Not fast action, because they are down 15 predictions to team Lucid, Intelligent Enterprise, and the Performance Guys.

However, 10 days later when they get in the game, they produce the BI equivalent of a football team looking at 3rd and 25 who runs a draw play to clear 5 yards for the punt team. BI goes diagonal? Seriously? You can't make that up. Seriously?

It looks like Oco is on to something with SaaS BI, focus on segments and customers, and appears to have a smart CEO. They also make a guarantee of success and apply a fixed bid methodology to their delivery approach. Very interesting. It also looks like their marketing, or at least their PR sucks, and that the CEO did not read the press release where he was quoted before it hit the wire. (I am also not sure about the Cincinnati Bengals Nike Swoosh logo thing, but that is another column.)

Oco has some name brand customers, a strong value proposition and a chance to succeed in 2008. Here is hoping they make good.

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!

The Microstrategy POV on the SAP and Business Objects Deal

Among the finest things to watch is the aftermath of any proposed acquisition is the competitive response. The Microstrategy camp has issued their own set of talking points and review of the SAP acquisition of Business Objects. They are fairly straight forward with their position - this is bad for customers and Microstrategy is the only pure play focused on BI. Of interest is the handy reference guide they provide on product overlap.

Significant Areas of Product Overlap Between Business Objects and SAP
Product Category	Business Objects	SAP
Dashboards and Scorecards	Xcelsius, Dashboard Manager, Crystal Vision	Visual Composer, Web Application Designer
Query, Analysis and Reporting	Web Intelligence, OLAP Intelligence, Voyager, Crystal Reports, Cartesis, Inxight Software	BEx Web Analyzer, BEx Analyzer, ABAP™, BEx Report Designer, Pilot
Office Plug-ins	Live Office	BEx Analyzer
Application Infrastructure	Nsite (on demand), crystalreports.com Vertical and Horizontal Apps	NetWeaver xApps Vertical and Horizontal Apps
Desktop Design Tools	Desktop Intelligence, Designer	BEx Query Designer
Portals	InfoView	SAP NetWeaver Portal
Performance Management or CPM	SRC, ALG Software, Cartesis	SEM-BCS, BPS, Netweaver® BI-Integrated Planning, OutlookSoft, Netweaver® BI Advanced Planner and Optimizer, mySAP ERP Express Planning
Master Data Management	Metadata Manager, Composer	SAP NetWeaver® Master Data Management
ETL/EII/EIM	Data Integrator (Acta), Data Federator (Medience), Data Quality (Firstlogic, FUZZY! Informatik)	Data Extraction routines to populate SAP BI
Mobile	Mobile Interactive Viewing (InfoView Mobile)	SAP NetWeaver® Mobile

Source: Microstrategy website. Link is HERE.


Also of interest is the fact that this is not totally complete or accurate. For example, there is no mention of the Dashboard Builder or Performance Manager as part of the dashboard and scorecard offering in box one. However, they do give at least one overview of the variety of overlap. As of this writing, no analyst or 3rd party has provide a similar side by side comparison that I have seen.

If I was SAP and Business Objects, I would fully expect to see this in wide circulation in competitive deals.

Process is the New BI

Is BI growing up, getting paid up, or maybe just getting passed up? Depends on who you ask, and what seat they occupy. At a minimum, there is activity on all fronts.

BI is all grows up? You know you are a full adult when Microsoft decides you are a real market. All the cycles around Performance Point signal that the Redmond death star is now fully operational and now focused on market share. If you have a market cap like MSFT, everyone not named you in any chosen category has a market cap the size of the resistance organization. They are big, but nobody seems to be going home. In fact, there are multiple pockets of resistance. Do not be surprised if the Redmond BI team enlists the Master Chief, available tomorrow, to counter the resistance. Can't wait to get in on the road show. Other notes of interest...

Item #1, the fact that the upstart is getting press in your father's newspaper. On demand BI with LucidEra is validated in the Wall Street Journal Technology section. Check this article that talks about the value of BI and mentions Cognos, Business Objects and LucidEra. Note to LucidEra - forward the article back to VCs that funded the new round and declare mission accomplished. New money to fund marketing, new WSJ article. You do the math. It took Business Objects about 10 years to get in the Journal. Guess the new guys are on to something.

Item #2. Business Objects and Goldman - Let's make a deal. Are they for sale? If you ask executives at the company, probably not. At least not publicly. However, when someone shows up with an offer, you either take it, or your hire a firm to conduct a process. Just because nobody is shopping does not mean nobody is buying. Do not be surprised if they get bought. By the same token, do not be surprised if nothing happens. I heard a couple times last year that multiple people had it on good authority that Oracle tried to buy BOBJ when the stock was trading in the low 30s. I heard that got punted when Business Objects said the price started at $40 per share. Looks like a good position, especially considering the current cycles. This could go either way this year.

Item #3. Unsolicited offer for SAS. My understanding from a good source is that a player that matters showed up with an offer. The response back from SAS was, "Bidding starts at $20 Billion." $20 Billion?!? 10X+ trailing twelve month revenues? Goodnight indeed. If you spend 20 years building the company in your own image, hold the controlling shares, and live in a hot market, would you sell? File this one under the simulation scenarios you wish you had. My money is on team North Carolina holding firm and staying private.

Item #4. Forrester reminds people that BI needs to get actionable and mentions TIBCO as a thought leader. You have that right, TIBCO runs BI. Boris Evelson and Colin Teubner from Forrester put out a report last week titled, From BPM to Optimization. The subtitle notes that while "BI vendors fiddle while TIBCO burnishes its BPM offering with Spotfire." This is essentially like calling out BI vendors as unfit to parent, much like Brittany Spears. This makes TIBCO out to be K-FED. Nobody has seen them parent, but sometimes proximity wins you points by association. I happened to speak to someone in product management last week from Cognos who indicated that Spotfire was last seen on the street about 20 seconds before TIBCO purchased them. This makes them an excellent candidate for Cold Case, assuming anyone was interested and wanted to tune in to another Law and Order knock off on visualization and analytics purchased by a platform wanna be. Which begs the question, do BPM analysts at Forrester not get BI inquiries, so believe their own press? Or, is the BI market turning into process management market and the BI players are asleep at the switch? Note to Ottawa, Cary and San Jose - check your dashboards!

Regardless of how you score, BI is hot. Looks like we are in for an exciting end of year finish.

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.

They Myth of BI Standardization

BI standardization is a topic that vendors have been pushing on their customers for years. There are no shortage of press releases, case studies, and customer references that talk about X company "standardizing" on "so and so's" BI platform. And from a vendor perspective, it's a good course to take. Everyone wants to become the standard. It's the corner square, the top of the hill, and and defensible position whereby you get to dictate the other technology that your product interacts with in the client IT environment. The nirvana catch-phrase of "we can't use them, they're not the standard" is the dream of every vendor who attains such lofty status, and the big 7-figure deals that BI and EPM companies tout in their quarterly calls are often predicated on the issue of "standardization."

The only problem is that it's not true.

At least not in the way that the vendors would have you believe it to be true. And we all know it. First, just look at the customer logs of all the big vendors. If company X was the standard, with 85% of the Fortune 500, wouldn't it stand that company Y could only say they had 15% of the same list at most? Why then is it that every vendor counts 7 out of the Top 10 pharmaceutical companies, the top 30 retailers, the largest of the global 1000--whatever your measure--amongst their customer base? It's because there is no standard. It's all about departmentalization.

Truth be told (I've always wanted to type that phrase), there are actually very few mainstream technology "standards" in companies today. Microsoft Office is one--or more broadly--Windows. But even there the free-apps crowd is starting to encroach in a few organizations. Still, let's give Redmond that one. ERP as a standard gets muddled when you've standardized, say on SAP, only to acquire a company running Lawson that's so customized that your SAP system can't do the things this other system does, so you keep that system and interface it to SAP. Is SAP still the standard? Maybe. But I think you get the point. Bigger companies have multiple ERP systems in play. Sure, SAP may be the "standard," but they're paying maintenance to three other vendors as well. The pure-play BI vendors for years have feasted on "heterogeneous" environments, data sources, etc. as the arbiter of all data. "Sure, you can have as many data sources as you want," they'll say, "but you need one BI standard if you REALLY want to get the benefit from business intelligence or performance management. So use us."

But do we actually need a BI standard?

The oft unspoken truth is that the bulk of the deals done by BI vendors are at the individual, or even departmental level, and they'll likely stay that way. Even the "global accounts" teams in these companies are usually in with only part of the account, or at most a few business units or geographies. GE for example, owns every product under the sun in their organization, and yet multiple vendors tout "standardization" by GE on their products left and right.

And we know why they all do it--it's for credibility. If you can say that "GE" has standardized on your products (vs. the competition), and people look at GE as a company they'd like to emulate, then that may be worth something in a sales cycle. There's just one problem--it's not true, and more importantly, it shouldn't be.

Here's why. Just like the iconic Apple 1984 ads that have evolved over time to encourage us all to "think different," the needs and uses and sources for information that people use to make decisions and solve business problems are not and cannot hope to be addressed by one tool or set of applications. There are too many use cases, too many data sources, too many new ways to use and share and analyze the myriad of information that bombards a typical worker on a daily basis. Do we really think that a typical project manager is going to use just structured report data to address all the issues they have in front of them? Are we to expect that everyone will access the same universe and metadata to query the database and get the answers to the questions in front of them? It's just not going to happen.

And why is that? Well, usability for one. Say I have to put together an analysis of the potential revenue associated with a new product launch. Now accessing my "standardized" BI tool for historical reports and forecasts is one place I'd go for information. But what about information that's not in that system? Past launch plans. Ad hoc analysis on a spreadsheet. Third party research data. Am I going to use the same BI tool to get this information? Probably not. First, the tool doesn't support getting me that kind of data. And second, even if it could, it would have to be a highly customized pre-set query that would let me get just what I need (not to mention helli-smart to know where to get it within the vast wasteland of both my hard drive and the company network).

So what do I to do get all the information I need? I use not just the reports from my BI system, but also things like spreadsheets, business process tools, files on the share drive, IDC or AC Nielsen data--whatever I need to accumulate enough information to put the plan together and send it around for review.

And all these tools also comprise my business intelligence environment.

As a manager, I WANT my people using all the available data and tools at their disposal to help make the right decision. The thing is, is that all the available data is not just in the tool we've "standardized" on, it's in a lot of places, and I'm likely to use not just a report I build from the BI system, but a lot of different BI tools in order to come to my conclusions. That's hardly standardization, and yet, that's the reality of business today. The goal of "business intelligence" is to help people make better decisions with the information at hand. But there's no one "standard" for how that should be done. There are lots of them. And they're going to be different based on how I work individually, how my team works, our industry, our company size, our technology model--all of which could be wholly different than the person and the team on the floor above me.

So when you see the next press release come out, the next huge client that's "standardized" on one product or another, keep in mind that they've done no such thing. They may be "officially" declaring that they'll use only that BI tool vs. any others, but there will always be a multitude of tools and applications at their disposal to ensure that their people solve the problem in the fastest way possible. That's when you see business intelligence achieving its promise. And as our close friend Martha Stewart* would no doubt say, "that's a good thing."

*This statement is a lie. We don't know Ms. Stewart and hope she doesn't sue us for stealing her catchphrase.

LucidEra Takes Better Visibility to the Bank

Proving once again that SaaS is not only a great delivery model, but a great way to the bank, LucidEra, an on-demand BI play, recently closed a new round of funding. LucidEra closed a Series B round to the tune of $15.6 million. There must be much rejoicing in the marketing department as the stated reason was investment in sales and marketing and innovation with their analytic solutions. This actually means more sales people, more development resources and some lead gen help. All good things and congrats to the team clearly carving out a pure play disruptor role as a leader in on-demand BI solutions. Let's hope that some of the new marketing dollars translate into Darren getting his own blog link so that he doesn't have to continue his multi-tenet situation squatting in CEO Ken Rudin's blog.

The Arrogance of the BI Vendors

Is it arrogance, is it lack of interest, or do they not get it? You might think I am referencing Nic's post below with photo that seems to imply that Microsoft is the evil empire and PerformancePoint Server is the Death Star of BI. This, while plausible, was not where I was going.

I managed to carve out some cycles last week to spend time at OMG's Think Tank on standards for business process management - as in BPM. Not performance management. The think tank was by turns thought provoking and painful, often within a matter of minutes. It is always great to get a bunch of vendors and analysts together on a neutral site and watch the games begin under the guise of "helping the industry." If you want the blow by blow on who was thinking what, I recommend you check out Sandy Kemsley's blog. However, one of the things I found of interest was Colin Teubner's lunch keynote that discussed the relationship between BI and process management.

Colin is an analyst at Forrester Research, focused on business process management. He gave a lunch time keynote focused on BPM with two main discussions - the relationship between process and BI, as well as BPM intersecting with collaboration and information. Both are much longer topics for discussion, but Colin presented some more recent thinking from Forrester on the intersection of process and business intelligence. Colin suggested 5 specific use cases on how the two technologies work together.

1. Business intelligence on a process - analysis and reporting on process applications
2. BI triggering or changing a process - BI kicking off a process
3. BI inside a process decision - when executing a process, BI should help
4. BI to help humans work with process -more information is better to make decisions
5. BI to predict the future of process work - think trend analysis and data mining

Look for this to be a topic of further research from Forrester building on work that was started initially by Keith Gile (Now doing strategy for Business Objects) and Connie Moore, a VP and research director at Forrester. Colin is working on this with a number of contributors. Of particular interest were two of Colin's comments.

The first is that from the Forrester point of view, BI converging with BPM is a no-brainer. I tend to agree on this point and you can see this starting to happen with BPM companies introducing BI capability as core to their offering and partnering with BI vendors. MSFT performance point is also heading in this direction. See also the Spotfire acquisition by Tibco that I commented on when it happened. So what is the hold up?

According to Colin, one of the big issues around this discussion is the arrogance of the BI vendors. He noted that BI vendors should get it, but that they don't understand it well enough and they are too caught up with themselves. He was also specific that none of the top players really offered real process functionality today. This is a very interesting observation, especially when you consider how long BI vendors have been trying to explain their relevance and importance, especially relative to the ERP big guys. Guy commented on this here and here. Seems to be going on 20 years now. Nothing worse than a young adult with a sizable IQ and low self esteem.

Is this arrogance, insecurity, too much navel gazing, or not enough interest to motivate action? Maybe this is just as simple as the devil you know - much easier to deal with than the devil you don't and the associated multiples required.

I think this is an open question and something to watch. This post both catches me up on posting and addresses the open questions to me by my performance partners in crime. Now about this Death Star issue...

You Just Gotta Read This - Open Source BI On the Move

Either it was a slow news week over the July 4th holiday in the states, a great interview, or both. Matt Asay on his CNET blog The Open Road, did an interview with Pentaho's marketing VP, Lance Walter. You know you are dealing with a pro because Lance took the opening softball question from Matt and gave him both barrels, citing a Crystal Reports replacement, as well as the Pentaho win at Universite de Montreal against the entire BI category. The press release is a complete category smackdown of the usual suspects in BI - Cognos, Business Objects and Oracle. Go big or go home indeed.

Also interesting to see Lance speaking kindly of the Jaspersoft camp while asserting that Open Source is big enough for everyone and undercutting those with proprietary technology. This follows rule #2 of marketing - it is not truly a category if you are the only one in it.

Open source is clearly on the rise, and Pentaho seems to be the leading voice in BI. Not only good technology, but good gear. This is not exactly a rule in marketing, but it sure is nice to have. Disappointing that Pentaho seems to be going more corporate as they no longer offer lingerie as a How?Ho! gear selection.

BI vs. Performance Management - Ground Hog Day

The circular debate of business intelligence Vs. performance management is noted by Jonathan Becher in his blog. He has incorporated a handy reference chart on the differences in case anyone is still not clear. Of note is that he did not incorporate the industry standard wheel diagram used by most vendors and analysts. He also makes an interesting and important distinction that performance management includes the requirement to "motivate" in front of monitoring, management and measurement. This is important and often does not get the attention it deserves. Performance is tied to motivation - as in take home pay. Not on a better looking dashboard or more financial analytics wrapped in BI.

BI Equals Better Operating Margin

Great case study on Dick's sporting goods today in CIO Insight and how they used BI to improve their operating margin and improve inventory management. The case study is great PR for Microstrategy and manages to call out a lack of performance by Cognos and Business Objects in sales campaigns and in deployment. All good PR types and the vendors they work for crave this kind of huge PR win.

Even better for end users of BI and performance management is that the connection to operational improvement and margin is spelled out in black and white. The business of business intelligence would take off in a big hurry if everyone could show the same direction connection between the data you have and business results. Showing a straightline from BI to improved operating margin would decrease meetings and free up budget in a big hurry.

Business Intelligence and BPM - Looking for a Clue

Clint Boulton wrote an interesting take on the intersection of BI and BPM for Datamation where he explores the ramifications of the Tibco's announcement of the purchase of Spotfire. I commented on this in a earlier post. Boulton describes this as a "head scratcher" but then does a nice job of finding some other people to comment on what it means for BI and BPM, and where the market might move. His summary - more intelligent business process capabilities.

I think the article provides a good perspective on what is happening in the market and how BI and BPM might work together as well as where the market is heading. I find it interesting that he notes that "leaders" in the market include IBM, BEA, Tibco and Software AG. Maybe true if you approach BPM as an integration issue, not a people, process or strategy issue. Not completely incorrect, but this is kind of like judging BI vendors by their data integration capability. While this is a key part of the puzzle, it is a lot like deciding to build a house. When you decide to break ground for your new home, the first person you call is not the plumber.

Boulton's article also illustrates gaps in understanding of the intersection of BI, BPM and performance management by analysts like Mark Smith of Ventana. Smith comments

"Most corporations weren't built on business processes...the challenge with process management is that it makes good common business sense, but most corporations aren't designed or managed by process, right? It's not because they're doing the wrong thing, it's because companies aren't mature enough to manage their business by process."

What?

Last time I checked, ERP was all about how to capture, automate and replicate key business process. Anyone been to an ERP or supply chain conference in the last 15 years? Maybe you might have heard of business process engineering - armies of consultants documenting business processes in the 80's and 90's. How about the holy trinity of performance management: Kaplan, Norton and Jack Welch.

BSC and Six Sigma are process methodologies designed to improve performance. This may help explain to Smith why BI, BPM and platform vendors spend so much time and money to offer BSC dashboards and scorecards, Six Sigma graphing tools, strategy maps, and ABC costing options for their finance analytics, Total Quality Management frameworks, and more. Regardless of size of company, I have yet to meet any company of any size where senior executives cannot explain their quote to cash process.

I am not sure if Smith's comment implies that companies are actually managed via Excel, planning and ad-hoc reporting, or if he truly believes companies are not mature enough to understand and manage process. If that is true, how in the hell did all the ERP, CRM, PLM, MRP and analytics get sold over the last 30 years? And why is process so important to so many people? Jack Welch or not, Smith's comment displays a clear lack of understanding of the issues and the market.

It is not clear if Tibco's move is a single data point or an early indicator of more BI and BPM intermingling. Regardless, more analytics linked to business process is likely a good thing, and I think most of us are mature enough to handle it.

TIBCO acquires Spotfire - Another One Bites the Dust

This just in from the land of M&A - TIBCO announced its intent to acquire Spotfire, a small BI vendor who positions themselves as next generation BI and analytics. However, this BI acquisition is different for a variety of reasons including who got bought, who did the buying and the fact that this really has less to do with BI and more to do with business process management and platforms. While many people have been writing about the intersection of BI, BPM, BAM and performance management, this time a player in BPM (as in business process) purchased a BI company. This represents one of the first acquisitions in the space and may well change the game for a variety of reasons.

TIBCO positions itself as a leader in BPM, but their focus and background is in integration centric process management. They tried to move up-stack and expand their footprint and relevance with the acquisition of Staffware a couple years ago, but they have had limited success in selling it. Gartner positions them as "process-aware middleware", but market reality is that they are an industrial strength ESB trying to come upstack to position themselves as a BPM player with focus on SOA - much the same aproach as BEA, just without the focus on application servers and aqua anything. They have clearly lacked optimization and analytics, something BPM vendors get very hot and bothered about. Enter Spotfire.

Spotfire positions themselves as the information insight company, and the leader in actionable analytics. They also position themselves as a leader and TIBCO promotes the same. Like most things, this is a function of what angle you look in the mirror. In the Gartner Magic Quadrant for BI Suites, published in January, Spotfire appeared for the first time, but smack in the bottom left quad. Gartner gives them credit as the only new entry in the category and calls out excellence in interactive analysis and in-memory analysis with capabilities for business analysts, not IT. This last piece is critically important to TIBCO and why this acquisition makes sense for all parties. Gartner also docks Spotfire for the things they don't have as a platform to compete in BI. Turns out maybe this is not about BI, especially not for TIBCO.

Among the things Gartner calls out is that Spotfire had limited channel strategy and reach. Joining the TIBCO family and getting access to their resources solves this problem in a big hurry. TIBCO's recognition that Spotfire gives them some sex appeal, solves their optimization gap and gives them something to talk about in analytics helps this make sense. It gives them something else to throw at market leaders like Savvion, Lombardi, and certainly BEA, who they most resemble. At a minimum this keeps things interesting.

A couple other observations:
1. There is not much precedent for infrastructure vendors to come up-stack and get relevant to business audiences in a business context like analytics and business intelligence. TIBCO's prior acquisition of Staffware for human centric process management has not proved to be successful to this audience, so this round either changes fortunes or looks like groundhog day.
2. The hype around optimization and analytics for process management by vendors and analysts just got a $200M validation. Does this signal something bigger?
3. The Gartner MQ for BI notes that the BI industry has now adopted a "process and strategy driven vision of BI." Interesting that the first real play in the space was not a BI company, but an integration focused BPM company putting their money where their website claims they are. Is the reality that BI is a nice add-on to BPM, not the other way around? Is the tail about to wag the dog?
4. The Gartner MQ notes an expectation of "co-mingling" between BI and BPM and calls out TIBCO and BEA by name. How long have these vendors been talking to Gartner about this? Who is next?

Interesting that today BEA announced a miss and the impact was speculation that BEA is next on the block to be acquired by Oracle or HP. Maybe we should be watching for BEA to make a play for a BI vendor. Look for things to get even more interesting.