Business intelligence (BI) is no longer a back-office, nice-to-have application. It’s the next business differentiator. Acquisitions & mergers are taking place in BI and corporate performance management (CPM) market. 2007 has been the year of dramatic BI consolidation. One of the hottest segments of the tech industry, BI software, is going through a major phase of consolidation as one major player after another is acquired by larger companies.

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Business intelligence market consolidation won’t terminate
Innovation
CA Ashwin Dedhia
Business intelligence (BI) is no longer a back-office, nice-to-have application. It’s the next business differentiator.
Acquisitions & mergers are taking place in BI and corporate performance management (CPM) market. 2007 has
been the year of dramatic BI consolidation. One of the hottest segments of the tech industry, BI software, is going
through a major phase of consolidation as one major player after another is acquired by larger companies.
Oracle overlaps its BI products with Hyperion: Hyperion itself was based on a series of mergers and
acquisitions, bringing together products that originated in at least a dozen separate companies and in Oracle, it
has joined a BI/CPM stable.
There is considerable overlap between these various BI products: for example, there are several different
relational reporting tools, and several OLAP servers. Oracle’s home-grown BI tools and applications are the
weakest & unsuccessful. These were replaced by the equivalent Hyperion products.
Ironically, Hyperion had spent the previous 18 months starting the integration of its many tools into its new
System; now Oracle started this all over again, in an attempt to rationalize and merge its messy range of
overlapping BI and CPM tools, and then integrate them with its other tools and applications. This is a rough ride
for both Oracle’s products and their users.
Customers should ask:
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Where are the analytics? Like Oracle, Hyperion lacks analytics beyond simple descriptive statistics. What’s
particularly lacking are predictive analytics (data mining, forecasting, optimization), the kind that help
leading companies differentiate, compete and succeed. This acquisition still does not provide an integrated
platform including data integration, storage, BI and analytics.
Where are the BI solutions that address specific business and vertical industry issues? While Oracle has
vertical and horizontal domain expertise — it is not significant player in the BI area. The acquisition of
Hyperion does not overcome this deficiency.
Where are the performance management capabilities for human resources, IT and internal operations and
the procurement office?
Both companies have had recent acquisitions that result in overlap of product functionality. Consequently,
customers will take a wait-and-see approach looking for the roadmap defining what products will remain in
the portfolio. Many such question will arise
SAP abandons its organic growth strategy to acquire Business Objects: The wave of BI acquisitions in 2007
got a dramatic boost on October 7, when SAP announced that it was acquiring Business Objects for €4.8bn
($6.8bn) cash (or $5.9bn net of cash in hand). This was by far the largest BI acquisition, expected to be
completed in Q1 2008, and is almost certainly another response to Oracle’s acquisition of Hyperion earlier in the
year.
There are several questions a customer should ask with this deal:
What’s SAP’s vision for performance management?
What BI products will stay? Which ones will go under the new company?
Who do I go to now for support and services?
Will I be forced to use the SAP technology stack? What if I don’t want to?
How can I start a project as a BOBJ customer with one set of technologies without knowing if I’ll need to
replace them soon after? The list goes on and on.
IBM tries on application software business by buying Cognos: Though there is little product overlap between
the product ranges, IBM’s large services business with other BI vendors’ products may suffer. Also, unlike other
large BI acquisitions, there are few apparent synergies between the IBM and Cognos software businesses — IBM
has in recent years focused on infrastructure rather than application software. Its earlier forays into BI have all
been less than successful & came to a sticky end, and it had looked like a bruised IBM had turned its back on the
BI software business. Cognos was more worried than it claimed about the prospect of having to compete as an
independent against Oracle, SAP and Microsoft. As IBM does not have an existing BI software business, forced
integration with other parts of IBM probably would not make much sense.
IBM Customers should ask “When will they be able to integrate the Cognos stack into their IBM solutions?”
Cognos customers who are not IBM users should ask, “Will you force me to install IBM infrastructure in future
upgrades?” and “How will this affect the existing integration projects?”
What will happen to the remaining BI vendors? The remaining players, including SAS, MicroStrategy and
Teradata, are likely to be in the sights of larger companies looking to cash in on what has become a full-fledged
boom.
What will they gain out of these acquisitions? While it gives the acquirers major market share, it potentially
limits the BI vendor’s technology to an acquirer-only solution in the future. Most organizations still need an
independent BI solution because they possess a collection of data, applications and platforms from multiple
vendors.
Customers should be concerned about their ability to openly leverage their current investment strategies in the
future. The goal of acquirers has been to move customers toward their offerings, which may not be in the best
interest of current BI customers. Another concern may be the integration of their multiple development
organizations.
In spite of the growing M&A, BI remains difficult to implement. Lot of customers say that BI is really hard to use.
They are not getting the value out of their investments that they have made. After having invested a lot in back-
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end systems, less than 10 percent of their employees actually touch it, or get access to the data. Few BI
customers have around six different BI solutions across multiple different departments, none of which talk to each
other. And they’re hard to use, so BI customers have to send people to training for months to learn how to use it.
Too often large companies focus on only their largest customers, instead of understanding the market needs
across the board. What customers do want when it comes to managing information is an independent information
management layer that can seamlessly integrate with both transaction systems and end-user tools, like Hyperion,
BO, Cognos & others. Then and only then will they be able to give customers what they want- independence and
choice to leverage the BI platform that makes the most sense for their individual requirements.
Any BI customer, needs to take a look at their current deployment and determine if end users are adopting the
technology, and if the solution is helping enable decision-making in the context of a mission-critical business
process that invariably spans multiple data sources, including real-time data. Customers want solutions that
deliver real-time decision-making for end-users across the organization. How will all the above vendors address
this trend?
CIOs today prefer to purchase their BI from an independent vendor – not an application or database vendor.
Customers have multiple ERP systems and warehouses like SAP, Oracle E-Business, JD Edwards, Siebel,
Peoplesoft, Microsoft, IBM, and Teradata, and they have other data sources such as XML, Excel, and Blogs. And
they also have a mixed bag of infrastructure like Portals, Security systems and Application Servers and as they
acquire and merge with other companies these scenarios get even more complex. Customers need an
independent performance layer that fits into their enterprise infrastructure and that sits on top of all of their
applications and data sources.
MAIA perspective: BI markets continue to evolve. There’s still plenty of room for growth in the BI market. The
BI market has only penetrated 10 to 15 percent of the known user base, but there is a vast opportunity for BI well
beyond today’s known markets.
MAIA does not see this trend as a threat. Unlike traditional BI tools like Hyperion, BO & Cognos which emphasize
centrally managed reports and dashboards, MAIA’s interactive, visual capabilities for data analysis help line of
business users across organizations easily spot trends, outliers, and insights in the information they use every
day without having to wait for new reports.
Operational BI is the call of the day. MAIA has a vision is to deliver what customers want through a single,
integrated solution and provide pervasive BI through high-performance, value for money BI solutions for all
business users throughout the organization, leading to better, faster, more relevant decisions. MAIA has ability to
deliver on-demand BI to the un-served masses and our wide-reaching data integration.
MAIA works with customers who are looking to deploy 1KEY as a way to augment their current BI tools and get
more ROI from their existing investments. This is another signal that traditional BI is becoming part of the
application infrastructure stack.
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Posted on February 6th, 2008 by Ashwin Dedhia
Filed under: Business Intelligence, Emerging Trends, View Points & Perspective | Edit
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