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An acquired taste
8th of June 2007 >
Business intelligence is maturing quickly. Signs include consolidation, wider appeal to SMEs and more user influence.
One of the signs of a maturing market is vendor consolidation. Business intelligence (BI) may be maturing quickly if that yardstick is anything to go by. Some large-scale acquisitions have taken shape since ITWeb last covered the BI space, foremost among them Oracle's buyout of Hyperion for .3 billion.
ITWeb's round table guests had plenty to say about the real reasons for the buyout (see the Q&A section), but it's clear to most observers that BI vendors are proving successful where some ERP vendors are struggling.
BI vendors tend to pride themselves on flexible and quick delivery of real value, with a special focus on doing the back-end integration properly; they're doing well as a result. But then again, they've had over ten years to get it right.
Oracle and Hyperion are naturally upbeat about the acquisition even though the transition period is a great time for other BI vendors to go shopping for uncertain customers of the two companies. Some independent observers are also happy.
Adrian van der Merwe, MD of 8th Man Consulting, says the buy-out bodes well for the local market as it means customers will now have access to a large organisation that is well-established in this country and has an extended network of partners.
"Following the acquisition, local customers will be able to obtain software and services for Hyperion products from any of Oracle's long list of partners," says Van der Merwe.
"The organisation has a huge presence. Hyperion products will now also benefit from Oracle's solid and long-standing research and development programme, another plus for local customers. In addition, Oracle plans to keep Hyperion heterogeneous so it will function against all platforms, including SAP and Microsoft."
Microsoft hasn't been idle on the acquisition front either. It quietly bought BI vendor ProClarity last May and has spent the last year consolidating the vendor's functionality into a low-priced offering that should appeal to SMEs.
Keith Jones, managing director of local ProClarity distribution partner Harvey Jones Systems, should have been out of a job when the buyout happened. Instead, he estimates his business will quadruple.
"Microsoft's history of acquisitions isn't great and it was a bit of a wobbly time. The market traditionally goes into hibernation when this sort of thing happens, but this is the best acquisition it's ever done," he says.
This month, the company will hand over its client base to Microsoft, but Jones says he will probably struggle to cope with the increase in services and training business after the handover. Part of the reason for that is the commodity factor Microsoft hopes to bring to BI through its new asset.
"Having all of ProClarity in a single, aggressively-priced box is the single biggest change in the BI market in the last 10 years," says Jones.
"Every other vendor is going to have to compete somehow. It's great for consumers because they will get better deals from the price pressure Microsoft is able to apply. I call it information democracy, where the cost used to be very high. That has now tumbled and barriers to entry for large deployments have fallen. And the opportunities for us will be in consulting and services because 80% of any solution is how you use it."
