In-Depth

BI Tools: Where IT's Spending Its Budget

The overall BI tools market grew by 5 percent in 2003—and should post healthy growth through 2008 and beyond

• By Stephen Swoyer
• 09/15/2004

The overall BI tools market grew by five percent year, topping out at $3.9 billion, according to market research firm International Data Corp. (IDC). BI looks to be a good bet going forward, as well, with IDC projecting a compound annual growth rate of nearly five percent through 2008.

IDC’s tally includes revenues from query, reporting, and analysis, data mining, and data mart or data warehousing tools. The research giant acknowledges that while five percent annual growth is a far cry from the blockbuster demand for BI solutions in the late 1990s, but argues that there is nevertheless healthy demand for software to analyze data.

“[This growth] is … the consequence of a shift in software sales from BI tools to packaged analytic applications and continuing price pressure from end users,” concludes says IDC research Dan Vesset. Vesset and IDC also predict further consolidation in what they describe as an increasingly mature BI tools market.

For the record, IDC says that Business Objects was the BI market leader in 2003, with yearly growth in the neighborhood of 17 percent and a 16.5 percent overall market share. Business Objects’ strong performance was paced by the former Crystal, which added to its overall share.

Cognos was the number two BI player, with nearly 11 percent of market share—a near two percent improvement over its showing in 2002. SAS Institute Inc., for its part, garnered 9.4 percent of overall BI market share—a slight (1.05 percent) decline. Hyperion Solutions Corp. (at 6.8 percent—a year-over-year decline of 8 percent) and MicroStrategy (3.7 percent) rounded out the list of top-tier vendors.

There’s plenty of room for these and other BI players to grow. According to IDC, a bevy of other vendors—including IBM Corp., which notched 4.6 percent of BI market share in 2002, but slipped in 2003—control as much as 52.7 percent of BI market revenues. That’s down from 53 percent of overall market share in 2002, but not appreciably so.