Is Business Intelligence (BI) Market Finally Maturing? Forrester Three Big BI Market Predictions

No. The buy side market is nowhere near maturity and will continue to be a greenfield opportunity to many BI vendors. Our research still shows that homegrown shadow IT BI applications based on spreadsheets and desktop databases dominate the enterprises. And only somewhere between 20% and 50% of enterprise structured data is being curated and available to enterprise BI tools and applications.

The sell side of the market is a different story. Forrester’s three recent research reports are pointing to a highly mature, commoditized and crowded market. That crowded landscape has to change. Forrester is making three predictions which should guide BI vendor and BI buyer strategies in the next three to five years.

  1. Commoditization and consolidation of multiple technologies. Forrester no longer sees reporting and querying, online analytical processing (OLAP), data visualization, dashboards, data exploration, and location analytics as separate market categories within BI. Rather, most enterprise BI platforms now provide these capabilities. The same commoditization is happening in the cloud and mobile BI as most leading BI vendors now build their platforms on cloud-based multitenant architecture or offer a cloud version in addition to an on-premises one. Similarly mobile BI is now simply a feature of most BI platforms.  In an equally significant development, the days of large, highly scalable BI platforms targeting enterprise tech pros versus more nimbe and Agile BI tools cateroing directly to business users have come and gone. Most vendors offering enterprise BI platforms have re-architected to become more end user friendly, and many Agile BI tools have significantly boosted their large enterprise features. Thus, our latest BI TechRadar now includes one all-encompassing category — enterprise BI.
  2. Mergers, acquisitions, sale of assets, and outright failures in 3 to 5 years. No market can support 73 vendors. This is good news for large enterprise software vendors and bad news for independent, smaller BI vendors. As the key differentiators between the top 15-20 (out of 73) have all but disappeared, why would enterprise buyers spend 6 or 7 digits on a BI platform which they may already get from their enterprise software provider (Microsoft, AWS, SAP, Oracle, IBM, and others)? Especially since they may get the BI software for free or at huge discounts based on the clients’ spend in the other enterprise software with these large vendors.
  3. Embedded BI subsumes Agile BI within 3 to 5 years. BI environments mostly driven by technology professionals weren't agile. Agile BI largely driven by end users authoring their own BI content and exploring and analyzing data on their own was a step in the right direction. While Agile BI will remain critical for strategic insights, decisions, and actions, it can't scale to everyday operational and tactical workflows. There's simply no time in the already busy workday for information workers to hunt for insights multiple times per day, often many times per hour. Connecting to a new data source, building a data model, tuning it for each decision, and then making multiple clicks to find an answer to a question simply takes too long. Forrester predicts that in the next three to five years, embedded BI that is contextual, actionable, and prescriptive will become the new norm for operational and tactical insights.




I find myself in general agreement as is usually the case, though I see what appears to be partially contradictory statements:

1) "Commoditization and consolidation of multiple technologies"

(No argument, but then why would customers double down on commoditization at high ongoing costs?)

2) "homegrown shadow IT BI applications based on spreadsheets and desktop databases dominate the enterprises"

(Commoditization would seem to be one of the drivers of shadow IT apps. I'm not suggesting that it's necessarily effective, but is one of the reasons we hear. which is another large undeniable trend particularly in F100. Another trend that has proven effective in some is large internal custom development that competes with IT vendors, particularly in F500 -- "all companies becoming a SW vendor")

3) "No market can support 73 vendors"

(We have many thousands of small and independent IT vendors around the world, presumably due in part to commoditization, most working on projects related to business and enterprise. Both customers and independents seem to be content with this relationship for matters that admittedly I don't always understand)

4) "As the key differentiators between the top 15-20 (out of 73) have all but disappeared, why would enterprise buyers spend 6 or 7 digits on a BI platform which they may already get from their enterprise software provider"

(Now here it gets interesting. Most of the BI market leaders you cite are having a very difficult time growing organic revenue, some of which are very costly. Some are shrinking in real terms. Granted rip and replace is relatively rare, but business failures aren't and IT is becoming ever-more important, so something isn't working in this pattern and trajectory. I think a clue is to look at what the fastest growing and successful new companies using and why? Are they using commoditized IT/SW to run their business? Infrastructure, communications, accounting and finance to a large degree, but that's not what is driving the win. All this suggests to me that it's probably time to re-define BI more than suggested)

Cheers, Mark

Thanks for sharing your

Thanks for sharing your insights on this topic, Boris. I agree with
you that the buy side of Business Intelligence still have a long way
to go, yet the sell side of BI is quickly growing.

According to a colleague of mine at Tenfold, the BI software industry
is quickly emerging as one of the top software categories in terms of
market size.

The nature of running a successful business practically revolves
around analytics these days, so business leaders need to keep pace
with the related growth and changes.

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