Continuation Of The BI Software Plus Services Convergence Trend

As we predicted more than three years ago, BI software and services are converging. Today, Deloitte announced its acquisition of the assets of the BI SaaS vendor Oco.  This is a great confirmation of several trends:

  • BI is hot. All of the leading management consultancies and systems integrators are putting BI at the top of their priority lists.
  • BI is all about software plus services. There’s no such thing as  “plug-and-play” BI. One always needs to bundle it with services to integrate data, customize metrics and applications, etc.
  • BI is a perfect fit for any firm with a software-plus-services offering, as demonstrated by
    • IBM acquisition of PWC, Cognos, and SPSS
    • HP acquisition of Knightsbridge and Vertica
    • SAS acquisition of Baseline Consulting
    • EMC acquisition of Conchango and Greenplum.
  • BI SaaS, which is what Oco offers, is still a niche in a much larger market of on-premises and hosted (same as on-premises, just hosted by a vendor — very different from SaaS), but it’s growing rapidly. Especially in the SMB sector, where internal IT resources don’t have enough bandwidth, capabilities, or budget to deliver BI apps in house. Or where business users don’t have the experience, expertise, or time to tell their own IT resources how to design and build such analytical applications, and want to leverage the business expertise of the SaaS vendors.
  • Many players are looking to expand into BI. In a similar move, Accenture acquired CadenceQuest last year.

 Hopefully, more similar acquisitions are on the way. Who’s next? GoodData, PivotLink, and Birst would be at the top of my list.


An angle that I didn't think about

A quote from a very experienced and succesfull IT enterpreneur/investor whose opinion I really trust. When I asked him if he thought this was a good deal for Oco, he replied:

"... not really. Consulting companies don't pay high premiums. I would be surpirsed if OCO investors/founders have got any money for it. Deloitte stated it is purchasing substantially all of the assets of Oco, though details on financial and employment specifics of the deal were not disclosed. It doesn't sound like they are paying much..."

Interesting ...

addition to your List (targets for acquisitions)

Hi Boris:

I don't have my list, but may be I can help you to grow your list. I think Tableau Software will be a good target especially for a buyer like Teradata who bought Aster Data recently and Tableau had/has a good OEM relationship with Aster Data. I also think that Tableau has the best functionality to read Teradata databases and I expect it will be even better very soon. And Teradata needs a good front-end Data Visualization toolset, which partially what Tableau is.

Now some deviation from acquisitions, but kind of related:
in case if some wise man from TIBCO is reading your blog, I also will advise for TIBCO to do with Spotfire the same thing that EMC did in 2007 to VMWare (NYSE: VMW, current capitalization $40B, compare with EMC capitalization of $56B; EMC bought VMWare for cash $625M in 2004) - make a new IPO for Spotfire and make it semi-independent from TIBCO corporate infrasturure and corporate policies and let Spotfire focus completely on BI and Visual Analytics market without too much TIBCO-related distractions and management restrictions.

Andrei, very good list. If we

Andrei, very good list. If we go with just independent small BI vendors - that's indeed a much longer list. I was just singling out potential BI SaaS targets in my original list.

I think Tableau larger than Good Data and completely in SaaS

Boris: glad you like it.

I just thought if you included GoodData, than Tableau desrved it too, because Tableau Software is much larger then GoodData sales-wise (according to Software Magazine "Software 500" list) and in terms of BI SaaS Tableau is completely in it with their Tableau Server and Tableau Public service.