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Posted by James Kobielus on February 10, 2009
Now that we've published my Forrester Wave for Enterprise Data Warehousing (EDW) Platforms, you'd think I can breathe easier. Far from it. No matter how carefully one words a report, there is always the potential for misunderstanding. I'm already seeing some of that surrounding the notion of what, exactly, constitutes an EDW "niche vendor."
For starters, that term--"niche vendor"--is not in my vocabulary, and not in my Wave. In the Wave, I used the standard Forrester methodology, which, based on transparent criteria and evaluation scores, distinguishes among "Leaders," "Strong Performers," "Contenders," and "Risky Bets." Rest assured that all seven of the vendors I evaluated--Teradata, Oracle, IBM, Microsoft, SAP, Netezza, and Sybase, are either "Leaders" or "Strong Performers."
We have no formalized definition of "niche vendors" in the Wave. Instead, all of the vendors in my Wave should be understood as "enterprise" data warehousing platform providers. The qualifier "enterprise" indicates that they are all addressing a wide range of enterprise information and knowledge management (I&KM) requirements for data warehousing. However, some of them are better positioned at this time to target a broader addressable market than are others, as evidenced by the details of their current offerings, strategies, and market presence. The vendors that are addressing the widest range of EDW marketplace requirements and opportunities scored higher in the Wave.
I think the crux of the misunderstanding lies in my acknowledgement that there are in fact "niche" segments of the EDW platforms market, and that some vendors have differentiated themselves well in those niches without, necessarily, being locked into them permanently. I refer to "niche markets," "niche solutions," and "niche deployments," but never "niche vendors." I do use "niche player" at one point, but that's to reflect a vendor's strategy, not its destiny.
To reflect that nuanced understanding, I placed the following qualifying language at the intro to the "Strong Performers" section:
What exactly, then, is an EDW "niche solution"? Actually, before I answer that, let's discuss what's not a niche solution. Essentially, any solution portfolio that is well-suited to addressing the broadest range of EDW requirements--and in fact has production customers to demonstrate a vendor's success at doing just that--is the polar opposite of a niche solution.
In order to be "well-suited" in this regard, an EDW solution portfolio should have the comprehensive functionality, flexibility, scalability, and affordability to qualify for short-listing by I&KM professionals with the broadest range of requirements. More than that, the vendors should demonstrate considerable success in selling their solutions into the full range of customer size classes, verticals, and geographies.
It's one thing to state, in the abstract, that one's EDW solution portfolio has universal appeal, but quite another to demonstrate that a critical mass of real customers across all segments have found it appealing enough to put their money down and standardize on it. A vendor's pricing, licensing, packaging, sales, marketing, distribution, support, and professional services are critically important for them to achieve this degree of universal--or at least widespread--adoption. Also, sometimes, what holds a vendor back from broad appeal is a marketplace perception issue that may be several years out of date, but is still a tangible competitive handicap.
One way of interpreting the Wave is that the higher-scoring vendors have the least "niche-y" solutions on the market. Of course, a niche may be a large one, as measured by the number of actual or potential customers, but it's still a potential competitive handicap if a vendor is having difficulty breaking out of it--or doesn't realize it hampers their growth prospects. And a niche may be a matter of a vendor's sales strategy--e.g., selling their DW appliance primarily as an OLAP data-mart accelerator--that has paid off in sales momentum but is becoming a confining pigeonhole. Or the niche may be an architectural specialty--such as a columnar database--that has great strengths for particular EDW-node deployment roles but may be suboptimal for other roles.
Sometimes, vendors position their niche approach as the future of the market as a whole, and as the answer to every EDW requirement that every user might have. And, sometimes, the market disagrees, as expressed through customer demand, or the lack thereof, leaving vendors mystified as to why they're not becoming the pre-eminent market leader.
And sometimes, an emerging niche (i.e., vendor growth-potential-limiting constraint) may not be apparent to the vendors that, heretofore, have assumed that it constitutes the entire EDW market. One such emerging niche is for EDW solutions that have not yet attained petabyte-scale in production customer deployments, in demo environments, or in the lab. In fact, that niche includes the majority of today’s EDW solutions, and the vast majority of I&KM requirements. Some vendors (read the Wave to see who) have moved beyond that sub-petabyte niche, or are just now traversing that threshold, or are soon likely to. Interestingly, most vendors in the EDW Platforms Wave offer a credible case that they'll soon attain full petabyte-scalability, but only a few had actual customer deployments showing that they're already there.
But none of this is to be read as vendor destiny. The Wave also scores the vendor's corporate and product directions, and their momentum in selling into customer-size, vertical, and geographic segments outside their installed base. All of this is to be understood as a vendor attempting to break out of whatever niche(s) its solutions may be concentrated in.
And, indeed, that's a key take-away from the Forrester Wave for EDW Platforms. All seven of these vendors are rapidly evolving out of the various niches in which their solutions have been deployed. That includes petabyte-scalability. Consequently, you shouldn’t assume--simply because a vendor didn’t demonstrate "well-beyond" one-petabyte scalability for the purpose of gaining a "5" on that Wave criterion in Q1 09--that the vendor won’t able to demonstrate that capability for you, in their lab, next week.
The EDW market is evolving extraordinarily fast. Clearly, we’ll need to update the EDW Platforms Wave in the coming year or so to keep pace.