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“It is the best of times and the worst of times.”
This memorable (and slightly modified) opening line from Charles Dickens’ A Tale of Two Cities aptly describes the business intelligence (BI) market today – a milieu rife with remarkable opportunities, as well as unprecedented challenges.
The rules of the game have changed, with new customer expectations, new competitors, and a new role for BI in the enterprise. And these are only some of the ground realities traditional “pure play” BI software vendors are attempting to come to grips with.
I’m in Orlando, Fla. where one of these vendors – SAS Institute – is holding its annual international conference: the SAS Global Forum 2007 (SGF). The event - focused on the theme of "innovation" - gets underway Tuesday morning.
On Monday evening, in his welcome address SAS CEO Jim Goodnight took time to remind the more than 3,700 attendees of SAS's leadership role - so far - in the areas of analytics and BI.
He cited the latest Magic Quardrant report for BI platforms from Stamford, Conn.-based Gartner Inc. as evidence that in a space currently featuring an eclectic assortment of new players, SAS continues to be a trailblazer.
It's true Gartner names SAS – along with Cognos, Business Objects and Oracle – as a “Leader” in the BI software space and even awarded the firm the “highest score for completeness of vision” of all competitors in the BI market.
However, the SAS CEO's speech today glossed over some of the less palatable stuff in the Gartner document, including the report's mention of the challenges confronting SAS and other pure play BI vendors.
For the Magic Quadrant report also suggests that with the BI landscape changing so swiftly, SAS cannot take its leadership position for granted and needs to do a bunch of things to remain ahead of the game. These include: moving beyond its sweet spot of advanced analytics, becoming price competitive, and integrating analytics into operational apps.
At this year’s SGF I hope - and expect – to hear about SAS’ future strategies, as well processes it has already put in place, to address these issues.
Also, as this is one of those scenarios where both “challenges” and “opportunities” have the same source - namely, radically changing customer expectations – I also hope to talk to as many SAS customers as possible about their BI needs…and frustrations.
What CIOs want
The growing need for effective BI tools – especially among large enterprises – has already been documented by several leading research firms – including Gartner and IDC.
These firms also forecast an explosive expansion of the user base for BI tools and capabilities.
• A Gartner global survey of 1,400 CIOs indicates that BI is the most highly ranked of 10 technology priorities in 2007. The worldwide survey represents CIOs with an average IT budget of $90 million, accounting for more than $100 billion of IT spending, as well as all major industries and countries.
• The worldwide BI software market is poised for constant growth through 2009, when it will reach US$3 billion, Gartner says.
• Gartner also predicts that this year, the BI revenues of the “mega vendors” – such as Oracle, SAP and Microsoft – will grow three times faster than revenues from the BI pure-play vendors.
• Framingham, Mass.-based IDC, in a report published last year, predicted the advent of a new wave of investment in BI applications, as "BI for the masses" becomes more popular.
IDC also anticipates a huge ferment and disruption in the market with the convergence of BI and several other technologies, including content management and data warehousing.
BI technology, it said, will merge with business process automation to create a new market called Intelligent Process Automation or IPA.
Gartner echoes this prediction and says the thrust towards inline analytics will lead to increased integration between BI and business process vendors – such as Tibco and BEA.
(It seems that IPA is another term for what has been variously dubbed “process-driven BI”, “in line analytics” and “operational BI.” Basically, it’s an approach that involves embedding analytics within the workflow of a business process).
Extending vs. embedding BI
Not surprisingly, “embedded BI” or “intelligent process automation” is not the vision “pure play” vendors – such as Business Objects, Cognos and SAS – have been pushing.
The Business Objects view, for instance, is of BI engines distinct from, though hooking into, processes and workflows, monitoring anomalies and trend changes.
“We see [BI] as a layer that sits across all applications,” is how James Thomas, senior vice-president for corporate products at Business Objects puts it. Cognos has a similar perspective, according to Don Campbell, the company’s vice-president of platform strategies and technology.
And the same view was articulated by SAS CEO James Goodnight, when I interviewed him at a previous SAS User Group International conference.
In that interview, Goodnight submitted that there isn’t any innovation left in the enterprise applications space. “How much innovation can you have writing paychecks, ordering stuff, sending out accounts receivable/ accounts payable, and that sort of thing? And that’s all these ERP systems are…they’re just plumbing.”
He said enterprise systems are needed because certain functions have to be automated (“you’ve got to be sending out bills and collecting money”) but they serve no purpose beyond that.
“The layer above them is where [SAS] belongs.”
The SAS CEO emphasized that his company is not in the inline interactive space, “where transactions occur quickly and you don’t read a lot of data, but just one record very rapidly.”
Instead, he said, “we’re in the business of gobbling up really huge amounts of data and just ripping through it…and these are two totally different stories and philosophies behind that.”
Today those stories – as well as the thinking behind them – may have to change.
The vision of the pure-play vendors of BI as a separate layer may make sense for their companies that have software to sell. But from a user perspective, “intelligent apps” that pay attention to the results of the processes they execute seem to be a better option.
As IDC puts it, "in many cases it makes more sense to perform analysis on transactions while the business process set is ‘in flight’ rather than waiting until afterward. By emb