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Thursday, 16 April 2009 07:52

Dynamics of BI-PM market changing, major vendors under pressure


Major vendors who traditionally hold sway in the business intelligence and performance management software market are under increasing pressure to retain their marketshare from technologies like software-as-a-service (SaaP), pre-packaged appliances and open source.

In fact, while the big, traditional BI-PM vendors like Oracle, SAP, IBM and Microsoft are undoubtedly still in a strong position, the threat to their marketshare is sufficient for Ovum to warn them that they can “ill afford to stand still” and advises them to “keep abreast of the current trends in the IT and economic environment that are impacting their business.”

According to Ovum, in its latest report - “Supplier considerations for BI-PM market in 2009”, the worldwide business intelligence and performance management software market continues to undergo significant change and is already resulting in a shake-out of vendors with the emergence of new technologies and deployment models that are challenging the basic economics of implementing BI-PM systems.

Ovum’s Madan Sheina says that there’s rampant consolidation around a handful of large suppliers like Oracle, SAP, IBM and Microsoft, and this will expand the addressable market for BI-PM “leaving enough room for revenue expansion for both large and small vendors.”

“Large IT infrastructure vendors have been preoccupied with integrating and rationalising their BI-PM suites and also aligning them to their middleware offerings. That will mean more BI-PM technology sales included as part of larger infrastructure deals”.

However, Sheina warns that while this will be beneficial to both acquiring and acquired companies, it will also foster what she describes as “a wait-and-see attitude” among many customers, as they assess the technical and financial impact of upgrading and migrating to an enterprise-standard BI-PM platform.
“Traditional BI-PM vendors can ill afford to stand still. They must keep abreast of the current trends in the IT and economic environment that are impacting their business.”

In the face of the threat to their share of the BI-PM market, Ovum advises vendors to refocus their efforts on product innovation and to recognise the opportunities from a relatively untapped mid-market segment, as well as the threats arising from ‘disruptive technologies’ like software-as-a-service (SaaS), pre-packaged appliances and open source.

Helena Schwenk, co-author of the Ovum report, advises vendors to take into account the importance of channel partnerships, the need for services provision, new expectations on licensing and pricing and to “look to new markets for growth.”

Ovum’s report highlights key trends and opportunities for BI-PM vendors to take account of, including:

• The mid-market is the next big opportunity and battleground
• Service providers will continue to fill a necessary skills gap
• A fresh look at licensing and pricing is required
• Corporate sustainability is currently in vogue
• Extend BI-PM beyond its relational data niche
• Customers expect BI-PM systems to be vertically aligned.

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