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Posted by Boris Evelson on April 17, 2008
Ever since I was an investment banker at JPMorgan supporting their Software M&A team, I was predicting that the future of products and services in enterprise applications is inseparable. Significant portion of our team M&A advice to product vendors was to beef up their services portfolios and vice versa. These were my thoughts then, that are still very valid today:
All of the above, plus the notion that Business intelligence (BI) is still very much an art, less so a science (see our latest "It’s Time To Reinvent Your BI Strategy" and "Strong Partners Are Key To Successful BI Initiatives" research reports), is causing vendors with significant BI product portfolio to lead the trend. Most notable relevant transactions were the acquisition of PwC Consulting by IBM and Knightsbridge by HP. These acquisitions allowed IBM and HP to take their rightful place alongside with Accenture, CGEY, Deloitte, Bearing Point and others as generic, vendor neutral management consultants with strong BI capabilities.
The trend is far from over. Now that SAP, Oracle and Microsoft moved into big time, stack independent, heterogeneous BI products, it most probably won't be long before they acquire a large management consulting firm with strong BI capabilities, or one of hundreds boutique BI consultancies that are out there and are doing extremely well. SAP, Oracle, Microsoft desperately need these management consulting capabilities to continue to compete effectively with IBM. If they don't, IBM will always have that one advantage and strong differentiation.
An interesting indication that EMC may finally start thinking seriously about BI (as we've been predicting for the past year, see our blogs), is EMC's recently announced intention to acquire small, but notable UK based management consultancy with significant BI capabilities -- Conchango. In addition to all of the reasons outlined above, this makes a whole lot of sense –- after all, storage is a significant component of any BI environment, but is probably the most commoditized one. Storage and server companies like EMC and Sun need to move up the stack, into apps and services, which EMC is doing with Conchango and Sun with MySQL. I am expecting more BI related moves from EMC and SUN.
This is nothing but the good news for our enterprise IT I&KM workers. It's another –- one of many –- proof points that BI market is far from being consolidated and anywhere close to being commoditized. There are still plenty of large and small players, plenty of competition and room for innovation –- which is always good for the ultimate buyers of these products.
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