Data Warehousing

The economy isn't the only reason the data warehouse industry is stumbling.

• By Clara Parkes
• 03/01/2002

Even before the economy sagged, data warehousing began to get a bad name because of exorbitant costs, lengthy implementation times and vendors promising far more than they could deliver.

Although a recent market study by Survey.com indicates that overall warehouse spending is on the rise, it also notes that spending on initial implementations has declined by almost 40 percent since last year. Survey.com's Nancy Stewart suggests that the decrease reflects both economic and market shifts, as “more, smaller-sized solutions are being implemented and more packaged software and cost-effective components are becoming abundant.”

Packaged Systems Gain Popularity
The tighter economic conditions have helped fuel growth in packaged data warehouse and data mart offerings. Although packaged data warehouse and data mart software revenues accounted for only $112.6 million in 1999, IDC predicts that this number will rise to $674.5 million by 2004.

The packaged market is not limited to established vendors. For example, in early 2001, the IT services branch of Royal Dutch/Shell spun off a new company, Kalido Ltd.

The company's product—the Kalido Dynamic Information Warehouse—is a packaged data warehouse with a design based on generic data modeling. Whereas traditional warehouses contain one table for each entity, Kalido has only two logical tables: One for business context data, the other for transactional data. It claims to offer greater management flexibility, including XML-based metadata management and the ability to store changes in the business context data without having to make any deeper changes to the database design.

Although Kalido has received significant attention already, analysts agree that 2002 will be a key year for Kalido to gain greater recognition and acceptance.

Warehouses Meet CRM
As more complex demands are placed on CRM systems, expect to see more frequent pairings of CRM and data warehouse technologies. The CRM data warehousing software and services market generated less than $4.2 billion in 1999, and IDC forecasts that these revenues will grow to over $20 billion by 2004.

PeopleSoft already offers the Enterprise Warehouse data warehousing solution, although it's essentially for PeopleSoft customers who have committed to the company's Enterprise Performance Management (EPM) suite. Meanwhile, in November 2001, Information Builders released WebFOCUS i-vision Analytical Suite for IBM eServer Systems, an analytical solution for SAP Financial, HR and Sales and Distribution systems.

Middle Ground: Logical Data Marts
Not physically distinct from the data warehouse, logical data marts exist only as structures defined in the data dictionary. They require no data replication or synchronization and have the potential to reduce management overhead significantly. Teradata is making strong advances in this arena.