Browse > Home / Business Intelligence / The View From Here: Has Consolidation Hurt the BI Industry?

The View From Here: Has Consolidation Hurt the BI Industry?

March 25, 2009

The striking thing about the conversations I had with analyst Nigel Pendse last week and Tableau Software CEO Christian Chabot in January is the similarity of what they said. Of course, the details are different, but both painted a picture of two very different groups of vendors: Staid and even fossilized older companies comprised of acquisitions and agile, smaller younger companies. And, if their comments are essentially accurate, it suggests big changes are coming for the business intelligence industry.

Consider this analysis of the impact of industry consolidation from Pendse. This comment is edited a bit for clarity:

[Consolidation] has been a bad thing for users. The first thing was that [buyers] overpaid for the acquisitions, so they then had to cut costs. One of the places where they aggressively cut was on product support. They often outsourced it because it was cheaper. They made one person support multiple products instead of just specializing on one. The real clear finding is that big consolidated vendors are delivering dramatically worse product support then the small, single product specialists.

Here is Chabot, also edited, on the impact of consolidation:

This is what most economic historians would remark is the death of an industry. Once the innovators have all been gobbled up and are being mined for their maintenance revenue by huge anonymous companies, really it’s time for the industry to be reinvented.

The two men both have horse in the race. Chabot, most obviously, runs a company that he positions as one of the re-inventors. And analysts always seek to make the big critique, as Pendse did during our talk.

But to dismiss what they say would be silly. Two independent people arriving at the same conclusion is not, of course, proof that the position is unassailable. It suggests, however, that there likely is some level of truth in what they say. The industry is still young, and the big vendors that Pendse and Chabot critique still have many advantages over the upstarts. But they should listen. And so should organizations looking for business intelligence platforms.

Posted by Carl · Filed Under Business Intelligence 

Comments

3 Responses to “The View From Here: Has Consolidation Hurt the BI Industry?”

  1. Suzanne Hoffman on March 25th, 2009 7:22 pm

    Christian and Nigel both do have a vested interest in the Business Intelligence Market. Nigel relies on the diversity of the players to help users and potential users weed through the hype to find the reality of the strengths and weaknesses of each vendor. Christian has a dramatically insightful user platform to shake up how people view their data and make better decisions.

    The fact that they have focused on the support of majors in BI is somewhat mystifying as the crux of the problem is the lack of commonality and lack of integration among the products owned by the vendors. They are stifling businesses today just when the business users need to be more agile and immediate in their ability to react to the market.

    Internally even within Oracle and SAP they can’t figure out which product to recommend where and how to support the disparate daisy chain of data flow. Cognos has it a bit easier since they have fewer products to integrate and ignore. All the product lines that are no longer in the limelight have had their support teams decimated in an attempt to “suggest” movement to the preferred products.

    Yes, support is worse than before, but that has more to do with the lack of internal vision about how to even integrate or migrate existing users to the platforms they want to keep. It will only get worse as the products evolve and meld/morph into newer versions of the products that no history of use. Hyperion was thought to have great support – until System 9. New product - New problems.

    The challenge is more one of how do we work with what we have and still be competitive and successful in the market and develop the expertise in house and use the best products, not the single vendor stack that is being created by the majors.

  2. Pat Murray on March 26th, 2009 8:54 am

    Suzanne has hit the nail right on its head. I will go further to clarify what has always been and always will be true.

    Business intelligence (BI) is a function of business. It was invented by the first person engaged in some sort of commerce who recognized that information is an asset that can be exploited to business advantage.

    What has been referred to as the business intelligence “industry” is not an industry at all, just a segment of the computer software industry. BI software can be used to automate the analysis and visualization of business information, and then extend it through the enterprise as desired to support business decisions. This is much faster than chisel and stone tablet.

    Service levels with the big names have never been very good. That they’re worse after consolidation for all the reasons Suzanne discussed in her message should come as no surprise to anyone. This is an indicator of the death of some software tools - no surprises here either, right? This is not the end of BI. Re-invention is not required.

    The single vendor stack is great for the single vendor. Business is free to find the expertise and products that best meets its BI automation needs.

  3. Chris Gerrard on March 31st, 2009 9:13 am

    The problem with the Big BI vendors is that they have progressively increased the amount of time, energy, effort, and resources required for business decision makers to obtain useful business intelligence (the noun) from their business data.

    The Big BI products are based around the paradigm of acquiring very large, very complex pieces of technology that require the expenditure of tremendous amounts of resources in order to deliver meaningful outputs to the ultimate consumers of the information.

    Implicit in this is the underlying idea that only by building monolithic warehouses or (some few) data marts can useful business intelligence be obtained.

    These are false notions of the proper role of BI technology, which should only be to reduce to the utmost degree the distance between data and the insights business decision makers require.

    There are two fundamental types of business intelligence that can be delivered to business decision makers: preconstructed analyses that provided answers to questions that have already been determined to be meaningful, using fresh data; and new insights than can be achieved by asking new questions of data, in following interesting patterns, investigating anomalies, and in pursuing previously unexplored relationships.

    The Big BI tools and technologies, and the consolidated data warehouse/mart approach implicitly represents the first type of BI. Building warehouses and the whole complex of migration, transformation, and analytical frameworks to publish analyses previously known to be useful is undoubtedly a good and useful thing. But it cannot be the whole of Business Intelligence (the practice of providing useful, high quality information to business decision makers.) In fact, approaching a BI program with the intention of building data warehouse and marts as the starting point is fraught with peril, incredibly difficult to pull off, and all too frequently fails to deliver adequate business value because the attention, time, energy, effort, and resources that should be devoted to delivering business intelligence are consumed building the infrastructure.

    Tableau is a good example of a classic disruptive technology. If doesn’t have all the capabilities of the Big BI vendors’ offerings, but it does offer something incredibly valuable to its target audience: the ability to explore, identify, and understand their data and achieve immediate insights into their business in ways that the Big BI tools simply cannot.

    Is there a place in the world for both Big BI and the smaller, less cumbersome, nimble, high-value products like Tableau? Yes.

    Are the days of Big BI numbered? Almost certainly not, if for no other reason than the businesses that bought them have already sunk those costs and are determined to pursue them. And there is a place for Big BI, as the publishing mechanism for regularly-produced business analyses once they’ve been identified, developed, and stabilized through the use of the Intimate BI tools.

    But Big BI must be careful. It has become ossified and lost momentum. The smaller, nimbler competitors will become more capable and as they do, if they maintain their ability to provide and intimate connection between business decision makers and their data the Big BI vendors will be increasingly in danger of obsolescence and extinction.

Got something to say?





CA Anti-Virus Plus 2008