Bright future for business intelligence

Larger business intelligence (BI) players are likely to lose out to specialists in the analytics tools market, according to analysts.

IDC said that 2002 was the first year during which BI vendors began to see a significant increase in analytic applications revenue in Europe at the expense of revenue for traditional BI tools.

Christina Steensboe, programme manager for IDC's European software group, said in a statement: "The future of the BI market will be affected by the continuation of this trend towards analytic applications.

"The likely result will be a decline in BI tools market shares for the larger BI vendors."

But Steensboe stressed that speciality BI tools vendors will not have a free ride.

The current market leaders will shift their focus to analytic applications, although this is likely to take several years, while competition from the database vendors that bundle BI tools will continue.

IDC insisted that there is still room for product improvement in areas such as collaboration support, security management, access to relational and multidimensional data sources, and scalability and performance.

"There is a continued need to educate the market on the benefits of BI," the analyst stated.

"It is still important to underline that BI software can leverage existing investments in other IT systems, such as enterprise resource planning and customer relationship management solutions, and enable the organisation to get the full potential out of those systems."

The IDC study, Western European Business Intelligence Tools Competitive Analysis 2003, found that the western European market for BI tools reached $1.2bn in revenues in 2002, growth of 1.9 per cent from 2001.

The figure is close to the 1.8 per cent achieved during the previous year, but still far from the double-digit growth seen previously.