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IBM, Microsoft and Oracle top Gartner's business intelligence platform rankings

The business intelligence platform market -- led by IBM, Microsoft and Oracle -- is in better shape to withstand the recession than most software markets.

The economy may be in recession, but the business intelligence (BI) platform market is still on pace for growth over the next three years, according to Gartner Inc.

In its recent business intelligence Magic Quadrant report, the Stamford, Conn.-based research firm predicted the BI platform market will grow by 7.9% through 2012, buoyed by companies looking to weather the economic downturn via improving efficiencies and reducing waste through BI and data analytics.

That's a slightly lower growth rate for BI platforms than Gartner predicted at this time last year, but still higher than many other software markets that have been hit hard by the downturn in corporate spending.

According to the report, "2009 is likely to be a critical year in which the total cost of ownership of BI comes under increased scrutiny, and its value as a decision-making tool in the toughest economic conditions is put to the test."

Gartner seemed less certain in its predictions for customer buying patterns, however. On the one hand, Gartner said 2008's market consolidation "seemingly marked the end of BI platforms as a predominantly standalone, best-of-breed buying decision."

At the same time, interest in independent BI platforms will also remain high, the report said, because of their emphasis on innovation and new features, and a growing interest in "workgroup" and departmental BI deployments.

Kurt Schlegel, a Gartner analyst and co-author of the Magic Quadrant report, tried to reconcile the seeming contradiction, saying: "More customers I speak to are stack centric. Whether it is IBM, Oracle, SAP or Microsoft, they trust their chosen mega-vendor to integrate it all for them. However, there is still a significant percentage that is heterogeneous in their buying preferences."

"The reality is right now the mega-vendors are integrating a bunch of disparate code bases [from acquired BI vendors] across their stack, so there is no tighter integration with their stack than buying an independent," Schlegel said via email. "However, that could change. Interoperability and portability won't go away, but the vendors will build more out-of-the-box solutions with their own BI platform running against their own software stack."

IBM tops a crowded leaders' quadrant

Aside from a few name changes resulting from acquisitions, Gartner's BI vendor rankings remained virtually unchanged this year from last. The leaders' quadrant, like last year's, was crowded, containing seven vendors – those that, according to Gartner, excel in both "ability to execute" and "completeness of vision."

Topping the leaders' quadrant was IBM, which completed its acquisition of Cognos last January. Gartner said the Cognos BI platform's "Web services-based SOA" is tops in the market, "with shared metadata across the platform enabling ease of transfer from report to query to analysis." Cognos' Microsoft Office integration and advanced visualization capabilities also helped its cause.

For the second straight year, Microsoft landed in the leaders' quadrant, largely on the strength of its "broadly capable product set at a low price point," according to Gartner. The software giant's BI pricing and packaging options make it particularly attractive to first-time BI customers and companies looking to reduce the number and complexity of BI tools, the report said.

Oracle, too, remained in the leaders' quadrant this year. Gartner cited as Oracle's strengths its 70+ industry-specific BI applications, its improved security and administration capabilities, and its ability to federate data from multiple sources into its BI applications.

Regaining its leader status thanks to its acquisition of Business Objects was SAP, which fell to the challengers' quadrant last year. The acquisition has proven a good fit, Gartner said, melding Business Objects' superior reporting and ad hoc query capabilities with SAP NetWeaver's OLAP functionality.

Size no longer matters

Despite the preponderance of mega-vendors in this year's leaders' quadrant, Gartner said vendor size, in this post-acquisition environment, no longer correlates to higher customer satisfaction or quicker return on investment.

"Formerly, while the market was dominated by independent pure-play BI firms, size was an important indicator as to capability; now, this isn't the case," the report said. "A $300 million revenue BI specialist may well (and often does) out-deliver a more broad-based vendor many times its size."

Actuate customers, for example, mostly use the vendor's e.Reports and other BI tools to fill specialized requirements, Gartner said. Board International's BI platform, meanwhile, is "focused on developing and deploying custom analytic applications … mainly for midmarket-size organizations." Both vendors were placed in the niche players' quadrant.

Other vendors making the cut in this year's BI Magic Quadrant, which ranks vendors based on their ability to execute and completeness of vision, include leaders SAS Institute, Information Builders and MicroStrategy; niche players arcplan and Panorama Software; and visionaries QlikTech and Tibco Spotfire.

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