In-Depth

BI Basics Still Lead Advanced Analytics Solutions

Demand for traditional end-user query, reporting, and analysis technologies outpaces demand for advanced analytic technologies. And the gap is growing.

• By Stephen Swoyer
• 08/02/2011

Industry watchers have been talking up "advanced analytics" for a couple of years now -- with no clear indication that the market was ready to follow suit. New market research finds that demand for traditional end-user query, reporting, and analysis technologies continues to outpace demand for advanced analytic technologies.

International Data Corp.'s (IDC) recent Worldwide Business Intelligence Tools 2010 study found that uptake of query, reporting, and analysis tools -- a category that IDC calls "QRA" -- still accounts for the overwhelming majority of BI revenues.

Paradoxically, even as advanced analytic technologies have grabbed more virtual ink, their share of the BI market has been slipping -- from 19.4 percent in 2008 to 19.1 percent in 2009. Last year, sales of advanced analytic technologies accounted for 18.7 percent of the entire BI market.

It isn't as if advanced analytics are down and out, however; far from it.

Demand for advanced analytic tools spiked by almost 9 percent last year, following a 2009 performance in which sales basically flat-lined, growing by 0.7 percent. During the same period, sales of bread-and-butter QRA offerings jumped by a full 12 percent. Sales of advanced analytic tools are growing -- it's just that sales of QRA technologies are growing faster.

One upshot of this is that the query, reporting, and analysis segment of the BI market now accounts for more than four-fifths (81.3 percent) of all revenues.

The advanced analytic segment ,au be disproportionately affected by the performances of the two companies that dominate it: SAS Institute Inc. and IBM Corp.. Big Blue vaulted into advanced analytic super-stardom via its acquisition, nearly two years ago of the former SPSS Inc. "The [advanced analytics market] continues to be dominated by SAS and IBM -- which combined hold a 51.4 percent market share -- and is therefore more strongly influenced by the performance of just these two vendors," writes analyst Dan Vesset in the IDC report.

"In the QRA market, SAP had a very strong year, with 19.9 percent growth following a lackluster 2009 when the company's QRA decreased for the first time."

Vesset describes a resurgent BI market that grew at a double-digit clip (11.4 percent) last year. That's certainly good news -- especially after a relatively dismal performance in 2009, when BI revenues grew by just 2 percent.

It also clearly illustrates the effect of a decade-long consolidation trend, during which former BI high-fliers Business Objects SA, Cognos Inc., and Hyperion Solutions Corp. were acquired by larger, non-BI-centric players.

"The largest of IT companies continue to dominate the BI tools market and to consolidate market share," writes Vesset, who notes that large IT companies such as IBM Corp., Oracle Corp., and SAP AG -- among others -- now control more than three-quarters (75.3 percent) of the entire BI market.

That's up from 57.9 percent in 2003. At the same time, BI-only vendors such as MicroStrategy Inc., SAS, and Information Builders Inc. (IBI) have fortified their markets: SAS was the third-largest BI vendor in 2010, with 11 percent of the market; MicroStrategy is the sixth-largest, with 3.8 percent; and IBI comes in at No. 8, with 2.2 percent. MicroStrategy, enjoyed a 17.3 percent spike in sales last year, but neither of the other two companies is growing at anything close to the industry average (i.e., 11.4 percent), however.

Conversely, mid-size players such as QlikTech International AB, Tableau Software, and Panorama Software have continued to outpace the market, growing at a rate several times that of the BI market as a whole.