Consolidation vs Independence in BI
November 15th, 2007
It’s been a while since I’ve been able to blog. A continuous travel schedule as I spend more time in the US than in Europe has kept me more than a little busy!
However, the last two weeks have seen huge changes in the BI industry. Now that both Business Objects and Cognos are being consumed (by SAP and IBM respectively), attention is inevitably turning to the next wave of independent BI vendors. Some are speculating that BI is not a category, but in fact an extension of the database or application (see Ephraim Schwartz at Infoworld for example).
While it certainly can be considered that BI can be used as part of the application, there are several really solid reasons why BI will remain independent as well as part of the application / database stack. Since I was fielding calls from journalists asking for my take on this left and right, I thought that I’d try and summarize as follows. Please chip in and comment if I’ve missed anything. Five key reasons for independence in BI 1. Heterogeneous data access
We live in a heterogeneous world, and will continue to do so for years to come. The average corporation has more than 20 different types of databases, so any BI tool needs to support a huge range of different ways of accessing data. Most independent BI vendors spend up to 50% of their R&D dollars supporting hundreds of different types of connectivity. This is significant expenditure, and it will inevitably be cut once the independents are incorporated into monolithic vendors. Engineering focus will inevitably shift to closer integration with other products within the business in order to drive product synergies and enable customers to be cross sold more products.
2. Switzerland; Thou shalt not become beholden to one mega vendor
When you need support for a heterogeneous join across DB2, Oracle and SAP data sources who you gonna call? Will Oracle support you accessing a DB2 database as well as an independent? Will SAP do what ever it takes to fix your problem when the data is in DB2 or Oracle? This is the powerful emotional argument that has sold thousands of CIO’s on a future with independent BI. You have a heterogeneous environment spanning SAP, Oracle and others and a myriad of different database types – when push comes to shove, is you BI vendor going to support you to the ends required given their competitive tensions with the other parties involved? 3. Standardization on one environment
The analysts, led by Gartner, have been telling business for years to reduce the numbers of BI tools that they use. It’s obvious why: fewer tools = more consistent basis for decision making; and of course lower cost. But the absence of a leading independent vendor makes this hard. Assuming the Cognos acquisition goes through, which is likely, SAS is to some extent the ‘last man standing.’ However, standardizing on SAS for BI would be a bizarre move – they have a proprietary feel and lack the breadth and usability of either Cognos or Business Objects. Better to consider Qliktech or one of the other young upstarts.
4. Product roadmap
In a single stroke, the product roadmap that your independent BI vendor committed to has gone. Hopefully you weren’t depending on any of these new features, but if past acquisitions are anything to go by, one of the first things to get de-committed is the product roadmap. It’s obvious why – everything changes with an acquisition; management, strategy, priorities, customer relationships, and of course the roadmap.
5. Innovation
A heavily concentrated software industry is absolutely not in the interests of innovation. Development priorities get focused on integration with the myriad of different products and technologies of the parent, (often through acquisition as well) not on innovation of the products themselves. As a result, don’t look to your newly acquired BI vendor to be innovating any time soon. Most if not all of the senior management will almost certainly leave once their earn out conditions have been met, leading the BI business lacking both strategic direction as well as tactical steering. To understand where BI is headed, look to the young pretenders – this is where innovation is to be found, and ultimately where the next generation is being born.
