Major Data Warehousing Events of 2008 (and Predictions for 2009)

BI analyst Michael Schiff looks at the accuracy of the predictions he made last year, examines the major BI events of 2008, and suggests new trends to watch in 2009.

As 2008 draws to a close, it’s time to look back at some of the major events of the year and speculate on what might occur in 2009. But first, let’s review my predictions from last year.

Results of Last Year’s Predictions

In December of 2007 I predicted that the following would occur in 2008:

  • Prediction #1: Further industry consolidations. What happened: Although not keeping up with the rapid pace of 2007, 2008 has seen several additional acquisitions this year. See the “Major Data Warehousing Events of 2008” section (below) for details.
  • Prediction #2: BI would become easier to deploy. What happened: Intuitive user interfaces, search-like query capabilities, integrated platforms, and shared metadata have combined to make business intelligence easier to deploy.
  • Prediction #3: Open source growth. What happened: The success of open source vendors such as JasperSoft, Pentaho, and Talend demonstrate the correctness of this prediction.
  • Data mining growth #4: What happened: Although not increasing as strongly as I had expected, data mining and predictive analytics usage continued to grow in 2008, both in governmental and commercial organizations.

Major Data Warehousing Events of 2008

Everyone Had An Appliance Story: With the acceptance of data warehouse appliances as part of an overall data warehousing architecture, major vendors (in addition to start-ups) have jumped on the appliance bandwagon. Column-oriented database vendors such as ParAccel and Vertica have partnered with hardware vendors to support and market data warehouse appliances, and Oracle has partnered with HP to produce the HP Oracle Database Machine. Even Teradata, a company that for many years dismissed data warehouse appliances as niche technology that could only lead to multiple versions of truth, has acknowledged the appliance concept with several platforms of its own and is now bragging that it was the original data warehouse appliance vendor.

Industry Consolidations Continued: Acquisitions in 2008 included data warehouse appliance specialist DatAllegro by Microsoft, Identity Systems by Informatica, specialty analytics vendor NuTech by Netezza, IDeaS Revenue Optimization and natural language processing specialist Teragram by SAS, and open source database vendor MySQL AB by Sun Microsystems. Furthermore, although announced in 2007, IBM’s acquisition of Cognos and SAP’s acquisition of Business Objects were both completed in January 2008.

The Recessionary Environment Encouraged Further BI Deployments: As companies sought ways to maintain profitability in the face of a deteriorating economy, they recognized the value of business intelligence for discovering new revenue opportunities, identifying areas of potential cost reductions, and reducing fraud. While IT expenditures were closely watched and, in many cases, reduced, many BI projects actually had their priorities increased.

Open Source Grew: Supporting cost reduction initiatives, open source business intelligence, database, and data integration technology has shown substantial uptake in 2008 to the point where open source offerings, especially products that have formal (albeit extra-cost) support are now making inroads into accounts that previously would not consider them. In many cases, free open source technology was initially used for prototype deployments with organizations upgrading to commercial versions with formal support when the prototypes were placed in production.

Predictions for 2009

Looking ahead to 2009, I expect the following to occur:

Prediction #1: Further Industry Consolidation

Acquisitions will remain a fact of life in the data warehousing industry. Since the economy is now officially in a recession, some vendors will be open to being acquired if only to ensure their survival. Other, more established, vendors may simply succumb to offers they, or their stockholders, simply can’t refuse.

If I had to pick two likely targets, my guess would be Informatica, perhaps by HP in order to augment its data warehousing technology portfolio, and SPSS, perhaps by SAP as Business Objects sells (as an OEM) SPSS predictive analytics technology for its BusinessObjects XI platform. Although neither of these two companies is experiencing major financial problems, their technologies would make attractive additions to the technology portfolio of potential acquirers.

Prediction #2: Cloud Computing will Come Down to Earth

Continued pressure to reduce expenses will serve as a catalyst for organizations both large and small to utilize cloud computing as an alternative to obtaining and funding in-house resources. Although small companies may use this as their primary computing platform, large companies may use cloud computing for incremental, perhaps one-time, projects. BI vendors not already offering on-demand software will establish a cloud presence to better compete in the small-to-midsize business (SMB) market.

Prediction #3: Open Source Growth will Accelerate

Economic pressure will accelerate the growth of open source technology as well, especially as open source has now established itself in production deployments. Because many vendors are utilizing source technology in their applications in order to reduce costs or, as in the case of several data warehouse appliance vendors, partnering with open source business intelligence and data integration vendors to offer a more complete solution, the growth will be seen in both standalone and embedded environments.

Prediction #4: The IT World Will Become Greener

The peak in energy costs earlier this year provided a strong incentive for organizations to consider becoming “greener” for cost savings as well as more altruistic environmental reasons. Organizations will look to minimize the energy costs associated with their hardware and consider both direct power consumption as well as associated costs such as air conditioning in their technology evaluations. This will further drive virtualization efforts to maximize the utilization of existing hardware.

Prediction #5: Major Emphasis on Solutions Rather than Tools and Technology

The need to quickly address business concerns as well as compliance requirements will drive organizations to seek customizable analytic applications rather than to build them from scratch with BI tools. BI vendors will respond to this demand with additional vertical and functional analytic applications, some of which may be obtained through the acquisition of their current partners. Furthermore, vendors such as Oracle and SAP will continue to enhance the analytic functionality of their operational enterprise applications.

I’ll report on the accuracy of these predictions next year, when I make new ones for 2010.

Must Read Articles