The market for business intelligence (BI), already worth some $85.9bn this year – a measure combining BI software and related professional services – is evolving into a mass market, writes Tom Pringle. My forecast of double-digit growth through 2017 across the BI market is shaped by a belief that the benefits of BI are starting to reach a far greater audience, made possible by developments in BI technology and how it is accessed.
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It is often said that the most commonly used software tool for analysis of data is Excel. So consider what might happen if those Excel users were granted access to the functionality of BI in a way that has, until recently, been restricted by the expense, complexity and long deployment times traditionally associated with BI – the rise of a mass market for BI and a period of disruptive but positive change in the market for BI.
I call the tools which are emerging in this new wave of BI business-led BI. They are, in a nutshell, BI that is easier to use, cheaper and delivers results faster. The continuous cycle of technology development has played its part in making business-led BI a reality. It is not, however, just the tools themselves that are changing, but the way they are accessed. For the first time this year, my market research included cloud BI as part of the estimates of spending in this area.
Cloud BI: $4bn by 2017
Cloud is not new. However, it can be argued its benefits have been somewhat late to come to BI. The rising importance of cloud BI is part of the natural progression of technology and its later arrival to prominence as logical. As an ever larger proportion of business applications are moved into the cloud, so the volume of data generated and stored there grows. Moving data is often complex and expensive, so seeking to analyse it where it resides makes sense; if there is more data in the cloud, it is inevitable that more analysis will be conducted there too. While my estimate that cloud BI is, currently, a relatively small part of the BI market, it is growing at an impressive rate. I forecast that, by 2017, spending on cloud BI will touch $4bn.
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The three defining features of business-led BI – cheaper, easier, faster – are the kind of benefits often associated with cloud fueling growth. The ability to sign up to a cloud BI service rapidly – for a monthly operational expense and to start working with the tool rapidly – position cloud BI front and centre of making it available to a much larger audience. Of course, it is not without challenges: physical location of data will remain an obstacle for those looking to run analysis of data in on premises systems. There also remain questions about security. In my view these are often (not always) a matter of perception; nonetheless, it remains prudent to ask them.
There are issues associated with this transformation of the market. A classic issue of IT and characteristic of BI – that of silos – looks like a serious problem. The ability of users to quickly and relatively easily obtain BI functionality – with limited corporate oversight – may lead to numerous, competing BI capabilities in an organisation. This may also be really bad news for hard-fought, corporate-mandated data governance/quality programmes and the effort put into forming a "single view of the truth". For BI suppliers, there is growing price pressure and the possibility of a fresh round of consolidation in the near future. Easier to use and access, BI will also force some services providers to re-assess capabilities, possibly leading to greater focus on industry and issue-specific analytical expertise.
The coming year or two are going to be significant ones for the BI market. The interest – some may say hype – of the recent past has been translated into an appetite for tools to access and analyse data. That demand is being met by the availability of BI systems which are helping tackle the traditional barriers to BI adoption. Cloud will play a significant part in helping BI reach the potential it has always offered: helping more people make smarter business choices every day.
Tom Pringle is the principal analyst at Pringle & Company, a market analysis house focused on business intelligence software and services markets. Prior to founding Pringle & Company, he worked at the Boston Consulting Group as its European IT practice manager.