In-Depth

BI Projects Survive

Industry watchers agree: It’s a good time to be doing BI

• By Stephen Swoyer
• 04/09/2003

That’s the consensus of many of the industry watchers who most actively follow BI, anyway.

According to market research firm Gartner Inc., for example, 2003 should be a relatively flat year for most BI vendors. In fact, a recent Gartner research bulletin projected that through the first three quarters of 2002, BI sales cycles will be longer and deals smaller than in previous years.

Nevertheless, Gartner and other firms stress that it’s a very good time to be doing BI—at least, as an alternative to marketing other technologies. Kevin Strange, a VP and research director with Gartner, points out that although BI revenues fell slightly in 2002, that’s nothing compared to revenue plunges in other market segments. “If there’s a small decline to flat in BI revenues for 2002, that was the shining star amongst the IT market.”

Moreover, a recent study from Forrester Research found that at the end of 2002, 44 percent of IT organizations surveyed indicated that they’d consider purchasing BI software in 2003.

This also concurs with the findings of Gartner’s Strange, who notes that as of the beginning of the current calendar year, most of the IT organizations Gartner surveyed hadn’t cancelled their planned BI implementations—even as they shelved other projects in the midst of a protracted economic downturn. “I’ve talked to a lot of clients in other areas that have said, ‘We have cancelled other projects.’ But when you look at the BI side, they’ve said, ‘We haven’t cancelled anything, we may be paring it back, we may not be going after it quite aggressively, but we’re still doing it.’”

The upshot, suggests David Folger, VP of enterprise analytic strategies with consultancy Meta Group, is that IT organizations are increasingly apt to accept BI as an ROI-enhancing technology: “[BI] has turned the corner. Organizations are feeling that there is a return on the investment.”

That’s not to say that BI vendors have turned the corner, however, stresses Gartner’s Strange. There’s a lot of work that still needs to be done, and one area that needs improvement more than most, he speculates, is the integration of BI tools with business processes. “There’s the need to understand business processes and customers better than they have. For customers right now, [with existing BI tools] there’s an opportunity at an incremental cost to get a better handle on what they’re doing, but the key thing for [BI vendors] is to find more even efficiencies [between their tools and business processes].”

Analysts are generally cautious about the efforts of some BI players to recast bundles of their discrete BI products as part of end-to-end platforms for BI. First of all, suggests Mike Schiff, a principal with data warehousing consultancy Current Analysis Inc., there’s the obvious question of whether or not these end-to-end offerings can actually compete with best of breed products from other vendors: “Can they do end-to-end as well as each of the vendors are doing from an individual components perspective?”

The key issue, suggests Gartner’s Strange, boils down to vendor visibility: Do a vendor’s strengths in one or several areas compensate for its potential weaknesses with respect to specific discrete solutions? “Oracle, for example—if they’re weak in an area or two in the BI stack, they can get away with it. Same thing for Microsoft. But for other vendors that don’t have the same name recognition, Strange suggests, “that’s going to be a harder sell.”