Consolidation looms in BI field.

• Author: Marshall, Jeffrey
• Position: Busines intelligence - Brief Article

Looking for a software solution in planning and budgeting? How about online analytics or data mining? What about customer relationship (CRM) management applications?

Right now, there are companies jostling in each of these business intelligence submarkets, and the players include household names like IBM Corp., Microsoft Corp. and Oracle Corp.; larger specialists like Hyperion Solutions, Cognos Inc. and Comshare Inc.; and smaller niche competitors.

Like most high-tech arenas, however, the overall business intelligence software market is almost certainly ripe for consolidation, with survivors buying additional capabilities or partnering for them. Opinions vary on how swiftly or how completely that will happen, but it's generally agreed that it's now mostly a matter of timing. A study by consultants Bain & Co. last year concluded that BI was made up of five submarkets ranging from $1.8 billion in annual revenues (query and reporting) down to $500 million (CRM).

For top finance executives, the promise of BI has often been frustrated because enterprise resource planning (ERP) solutions have failed to deliver integrated information. "Major application systems such as CRM (customer' relationship management), ERP and SCM (supply chain management) systems are designed to improve business applications," says Richard Skriletz, national managing principal for business intelligence and data warehousing with RCG Information Technology, which specializes in IT strategy and design, application development, management and integration. "They focus on optimizing business transactions, not on optimizing information distribution and analysis."

Skriletz adds: "BI benefits are based on two critical factors: identification and, gathering of essential, enterprise-wide business data into a single data warehouse and the power of BI technology to access and manipulate this data easily." For vendors; he says, two choices have emerged: "Merge their products with others through consolidation or develop the same capabilities into their BI product. So far, more vendors seem to be choosing the path of developing greater functionality into their product."

Increasingly, however, vendors are turning to partnerships or original equipment manufacturer (OEM) agreements with competitors to develop that functionality. Hyperion, for instance, recently entered into partnerships with both Crystal Decisions and Sagent Technology inc. In an interview, Hyperion CEO Jeffrey Rodek...