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BI market eked out growth in 2009, but CPM sales stagnated

A strong fourth quarter helped the business intelligence (BI) market eke out positive growth in 2009, but CPM revenue remained flat for the year.

Thanks to a pick-up in sales at the end of the year, the business intelligence (BI) market managed to eke out positive growth for 2009, according to IDC.

Total BI software license and maintenance revenue reached $8 billion, up 2.5% from 2008, according to a new IDC report. That’s better than most other IT markets, many of which stagnated or actually shrank due to the great recession and a reduction in IT budgets.

But the low single-digit growth rate represents a significant slowdown from years past, when the BI market expanded at double-digit rates.

And there’s more bad news for BI vendors.

“The recessionary trends, which began to show a slowdown in purchasing in the middle of 2008, are going to have a negative impact on maintenance and subscription revenue for several quarters,” wrote IDC analyst Dan Vesset.

Sales of advanced analytics tools grew more slowly than the BI market overall, a trend IDC expects to reverse itself as “the pent-up demand for [query, reporting and analysis] tools will be satisfied and more organizations will shift focus to advanced analytics.”

The corporate performance management (CPM) market did not fare as well as the BI market, with sales staying essentially flat year-over-year.

Revenue for CPM software and maintenance stood at $2.2 billion for 2009, virtually identical to 2008, according to a separate IDC report. The analyst firm expects growth to pick up, however, as more companies become aware of the benefits of CPM software and the need to comply with federal and state regulations increases.

“The need to comply with government regulations, including International Financial Reporting Standards (IFRS), will drive demand for updated consolidation and reporting software as well as financial governance, risk and compliance applications,” wrote IDC’s Brian McDonough.

The market is expected to grow at a compound annual growth rate of 6.7% through 2014, McDonough said. Most companies still use spreadsheets in favor of CPM software for budgeting and finance purposes, according to analysts.

As for the main players in the BI and CPM markets, the mega-vendors still dominate. SAP topped the BI market with a 19.5% share, followed by IBM at 15.3%, SAS with 11.4%, and Oracle and Microsoft virtually tied at around 9%, according to IDC.

The CPM market is currently dominated by SAP and Oracle, which have 26.6% and 23.7% shares, respectively. Coming in a distant third is IBM, with 9.6% of the market.

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