The Internet and the advent of Microsoft in the business intelligence (BI) sector is about to cause dramatic change in the marketplace, but not all vendors will survive the impending maelstrom.
This is the view of market researchers at Gartner Group, which held its fifth annual Enterprise Systems conference in Chicago this wee.
The move to mass market BI is also being compounded by recent large scale deployment of end user tools, and the decision by enterprise resource planning vendors to include more and more decision support functionality into their applications, which means BI suppliers need to find new ways of including added value.
?There are dangerous and opposing forces at play and only some of the vendors will survive, not all. There?s already a lot of consolidation going on, but most of the suppliers are being acquired," said Howard Dresner, research director.
He went on: "The BI market was worth $2 billion in new software licences this year and will increase to $8.3 billion by 2003 because Microsoft will have jumped in [with its Plato product] and expanded the market. That?s important, but growth causes change."
He explained that a mass market was likely to be established within the next five years and this would result in price cuts.
As a result, the sector was likely to segment, with the majority of current vendors offering cheap, generic tools with low levels of functionality and little support, possibly as self-serve packages over the Web.
A few, however, would start offering enterprise BI suites in a natural evolution from there current positioning. These bundles are likely to include report writers, query and data mining tools and be very scalable.
The high end vendors would consolidate too, but the survivors would provide a proliferation of custom or ready made decision support applications and become domain experts and systems integrators rather than technology companies.
The last group would supply BI platforms, infrastructure and components for those users wanting to build their own systems, but the majority of their revenues would come from OEM deals with applications and suites suppliers.
However, the next big theme over the next couple of years, according to Dresner, will be the need for enterprise scalability brought about by the Web. Tools will need to support a million users rather than tens of thousands and petabytes and exabytes of data, but they will also no longer be based on pull or even push technology for information delivery.
Instead, they will need to include such intelligence as trending agents, which can adapt to user behaviour over time and enable them to ask the right questions, or may even retrieve the right information without being asked.
But, the new demands for scalability will also mean that suppliers will need to rethink their licensing practices. Dresner suggested a unit based pricing model as one alternative, where users would no longer buy on a per user basis, but based on the functionality they needed.
?This is all starting to hit, but I?m not sure when it will climax or when it?ll subside. All I know is the tropical storm is imminent,? he concluded.
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