Sunday, December 2, 2007

What’s in Store for Business Intelligence in 2008

It’s that time of year again. Everyone from George Bush to journalists to my next door neighbor whips out their crystal ball and predicts what’s in store for 2008. So, I’ve dusted off my own crystal ball and joined the fray. Here are my Predictions for Business Intelligence in 2008:

1) SaaS BI will continue to gain market traction

OK, given where I work, it’s no surprise that I’m predicting the continued growth in market traction for BI delivered as a service. But, it’s not based on wishful thinking. I’m basing this on real evidence coming from the market. Customers of SaaS BI solutions are fanatical about them – they love having analysis delivered as a service. Just take a look at the reviews from users of SaaS analytics solutions on salesforce.com’s AppExchange here and here. In all my years in the BI industry, I’ve never seen such positive feedback. It’s this kind of customer success that bodes extremely well for the continued rapid growth of this market in 2008.

2) BI innovation will be led by newer vendors

2007 was characterized by massive consolidation in the traditional Business Intelligence market. We saw the acquisition of the three biggest public BI companies, for an aggregate purchase price of about $15B. That means that in 2008, instead of being able to focus on innovation, Business Objects, Cognos, and Hyperion are going to be preoccupied with the technical (and cultural) challenges of integrating a stack of complex on-premise product suites into even more complex infrastructures from SAP, IBM, and Oracle. Unfortunately for the acquired companies, their new definition of BI in 2008 will therefore be “Bloated Integration.”

As in any forest, when the tall trees get cut down, the newer undergrowth has a chance to flourish. So, it will be up to the newer vendors to provide innovation in the BI market. With advances like SaaS deliver models, in-memory databases, and data visualization solutions, we’re definitely seeing that innovation in 2008 will be alive and well with a select group of newer vendors.

3) There will be a shift away from tools towards prebuilt analytic applications

I occasionally hear people say “Analytic applications will never succeed. It’s been tried before, and it never worked.” These people are probably direct descendents of the people who said that space flight would never happen, because all the initial attempts failed. But, a lot has changed that now position analytic applications for market success.

The historical crop of analytic applications came from BI tools vendors trying to reinvent themselves. This turned out to be too much of a challenge for these vendors. They had built their success on selling tools to IT. It required a massive change in their DNA and their personnel to start selling prebuilt solutions to business users, and these vendors weren’t able to make the leap. Also, the applications themselves were usually presented as “templates,” and the customer was then encouraged to buy the vendor’s tools so they could heavily customize the application, thereby defeating the purpose of having a prebuilt solution in the first place. It made the prebuilt solutions no easier to deploy than a solution that was built from scratch.

The new crop of analytic applications come from vendors that only sell analytic applications, not BI tools. These companies’ DNA is focused on selling applications that solve business problems for business people, rather than on selling tools that solve the problems facing IT. And, analytic applications are now configurable without requiring specialized skills or toolsets, just like you can configure salesforce.com or your own Google homepage without any specialized skills. Finally, by delivering these applications via the SaaS model, customers now have analytic solutions that are simple to set up, simple to use, and simple to buy – a far cry from the earlier “template” analytic applications that required complicated customization, and a driving factor for the increased adoption of analytic applications in 2008.

4) Applications that integrate data and improve processes across transactional systems will drive the next wave of SaaS.

The on-demand revolution began with CRM and other transactional applications that made it simple for companies to capture data and automate business processes. There is now a gold mine of data that has been captured by these applications. Whereas the first wave of applications focused on making it simple to get the data in, the next wave of applications will focus on making it simple to get the data out so it can be analyzed to help companies find ways to improve the processes they’ve already automated. This ability to multiply the value of the data captured by transactional applications will continue to drive the growth of this second wave of applications in 2008.

5) A new breed of BI channel partners will emerge

With the introduction of on-demand analytic applications (see point #3 above), the BI channel will continue to evolve in terms of the types of services that will be offered by VARs and SIs. Historically, the majority of VARs and SIs have focused their attention on providing technical services such as implementing large data warehouses and dealing with integration and infrastructure. In 2008, rather than focusing on technical implementation, we’ll see a new breed of channel partners emerge who leverage SaaS applications to provide more strategic analytic best-practices and performance management services that will increase the value of business services they provide to customers.

So, that’s what my crystal ball shows. To sum it up, look for 2008 to be an exciting year marked by a rapidly changing BI landscape. And, I’m sure there will also be some interesting surprises!

posted by Ken Rudin at 9:56 pm

Comments

Seth Grimes

Posted on 3rd December, 2007

Ken, I blogged my reply:

http://www.intelligententerprise.com/blog/archives/2007/12/business_intell.html

Neil Raden

Posted on 4th December, 2007

You go, Ken!

I think it is all reasonable and I quite agree with your analysis. However, it may be wishful thinking to believe that this will all happen in 2008.

There is a lot of room for analytic applications now, but that’s because the tools are so different. Everything we did 10 or even 5 years ago was managing from scarcity - not enough hardware, or storage or bandwidth. And everything too expensive. So technology has altered the calculus, but it’s the Internet that really changed everything, by allowing open standards to take hold and creating a completely new way to do computing.

But I don’t know how much movement there will be in twelve months.

-NR

Patrick Morrissey

Posted on 6th December, 2007

Ken & Darren -

Great post and thanks for starting the discussion on trends in 2008. I picked up on Seth’s thread and tried to continue this discussion in our blog.

http://performanceguys.blogspot.com/2007/12/lucid-predictions-for-bi-in-2008-and.html

Here is to a great 2008!

James Taylor

Posted on 7th December, 2007

Interesting list. I think BI will have to morph to include new, more operational capabilities, if it is to deliver #4. In particular companies traditionally focused on reporting and analysis will have to think about how they can use data to change the way decisions are made in systems and processes.
JT