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Gartner: Business intelligence software market continues to grow

BI software revenue grew by 13.4% in 2010, hitting the $10.5 billion mark, according to Gartner, which said SAP continued to lead Oracle, SAS, IBM and Microsoft in market share.

Just before Gartner Inc. is set to host its Business Intelligence Summit 2011 early next month, analysts released information that reaffirmed why it’s not a bad idea to keep an eye on this corner of the technology world.

In a recent press release, Gartner said worldwide business intelligence (BI) platform, analytic applications and performance management software revenue reached $10.5 billion in 2010. According to Gartner, that figure reveals a 13.4% increase over revenue generated in 2009.

“In 2010, the global resurgence from stimulus packages, general improvement in the macro-economy, and new product releases contributed to a surge in BI software spending,” said Dan Sommer, senior research analyst at Gartner.

Last year, Gartner reported that the 2009 BI software market increased 4.2% over revenue generated in 2008. Sommer said the 2009 BI market was affected by the recession and posted numbers “nowhere near the levels of 2008.” It should be noted, though, that Gartner’s 2008 analysis also echoed an unusual time in BI history. In 2007, the three largest publicly traded BI companies—Business Objects, Cognos and Hyperion— were gobbled up by SAP, IBM and Oracle, respectively. Those deals were finalized in 2008.

After acquiring Business Objects in 2007—the number one BI software vendor, according to Gartner —SAP climbed to the top of the heap in 2008, taking hold of 23.4% of the worldwide business intelligence, analytics and performance management market.

This year’s results are no different. Gartner’s latest numbers show SAP still clinging to that number one position with 22.9% of the 2010 market share. The trend continues down the line with Oracle at 15.6%, SAS Institute at 13.2%, IBM at 11.6% and Microsoft at 8.7%, all maintaining a steady hold on the BI software market when compared to the year before, according to Gartner.

Those top five vendors controlled 72% of the market in 2010—strikingly similar to the 71.2% Gartner recorded for 2009. The four large stack vendors that make an appearance in the Gartner report (SAP, Oracle, IBM and Microsoft) carry 59% of the market share in 2010 compared to 57% in 2009. All four companies showed an increase in revenue between the two years as well.

Changes between 2009 and 2010 were, in fact, minute, according to the data. For example, this year Gartner shows a little more than a two-point market share percentage difference between Oracle (at 15.6%) and SAS Institute (at 13.2%). Last year, Gartner reported the two companies were neck-and-neck with each other, citing a difference of just three-tenths of a percentage. (Oracle at 14.5% still had the upper hand over SAS at 14.2%, according to Gartner’s numbers.) IBM’s market share in 2010 dipped from 12.2% to 11.6%, while Microsoft made up that difference by inching forward from 7.9% in 2009 to 8.7% in 2010.

 “BI spending has far surpassed IT budget growth overall for several years, and it is clear that BI continues to be a technology at the center of information-driven initiatives in organizations,” Sommer said. “Vendors aggressively market their capabilities in this area, so revenue growth is as much a function of vendor push as a demand pull.”

Gartner also breaks down its analysis by subsegment, allowing for a closer look at who leads the way in BI platform, CPM suite and analytic applications and performance management. SAP, Oracle, IBM and Microsoft hold almost two-thirds of the market share in BI platform and CPM suites while SAS continues to dominate in analytic applications.

“In 2009, the difficult environment forced companies to focus on the ‘bread and butter’ BI projects they had already started, hence, upgrades in the more-maintenance-heavy BI platform segment took priority and grew faster, while sales of CPM and analytic applications suffered," Sommer said. "In 2010, packaged application functionality returned in a big way.”

Although largely controlled by a handful of companies, other vendors are still out there, filling in the remaining almost 28% of the BI software market. And they’re still pushing forward on creating new BI products.

In fact, just last week MicroStrategy, which fell off the radar in the 2010 Gartner reporting after holding 3.2% of the worldwide BI, analytics and performance management software market in 2009, released MicroStrategy 9.2. The software includes Visual Insight, a self-service BI feature that enables users to investigate questions, build reports and drill down on data without help from IT.

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