Has the business analytics software industry adopted a kinder, gentler attitude where everybody wins -- just like...
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in nursery school?
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For a more granular idea of market share, IDC breaks down the market into business analytics tools, such as generic data warehousing, BI, query and reporting tools, and business analytics applications that address CRM, finance or supply chain analytics. Within the tools segment, Oracle again took the top spot, followed by IBM and Microsoft. Oracle owes its position mostly to its data warehouse market dominance, Vesset said. He expects the database giant to continue to lead the overall market for the "foreseeable future."
"Oracle is putting more emphasis on both analytic applications and BI tools, and the data warehousing market is not going away," Vesset said. "Both Microsoft and Oracle are showing strong growth and stronger interest in the market, which is a change from past years, where the market was primarily dominated by the specialty vendors."
The application market is a slightly different story, however. In the segment for supply chain and operational analytics applications, SAP was the revenue leader in 2005 with $480 million, followed by Fair Isaac, Oracle and SAS, Vesset said. In the segment for CRM analytic applications, Siebel (now Oracle) took the top spot, followed by SAS and SAP. And for financial analytics applications, Hyperion had the highest revenues, followed by Cognos and SAP.
Trends in business analytics
IDC predicts that the market for business analytics will grow at a rate of 10% over the next five years, Vesset said, because it has become a top spending priority for many companies.
"In our surveys, we find that [business analytics] is either the No. 1 or No. 2 priority for most organizations, along with security software," he said.
Compliance has increased interest in analytics and BI because companies want to have confidence in their numbers and be able to access business data faster, Vesset added. Another major trend is organizations' desire to improve employee accountability and performance management, which are often closely linked with BI or analytics activities, he said. This is driving BI out to more users and inspiring more companies to invest in analytics applications and tools.
Advice for buyers
Buyers evaluating business analytics technology should take into account the volume of mergers and acquisitions over the last few years, Vesset said, adding that organizations should still look at smaller vendors, but potential acquisition should factor into buying decisions. He also dispelled some of the myths around consolidation and standardization. It's important to unify the data management platform to ensure data integrity, but not as critical -- and often not as effective -- to consolidate to just one analytics interface or vendor.
"Different tools have strengths in different areas. It's unlikely that anyone will be satisfied with a single [analytics] vendor," Vesset said. "We advise buyers to continue to evaluate a number of different tools and not to think that any single one of them could necessarily take care of all of their analytics needs."