David Jones, director of London-based Paragon Consulting Group, is one merger away from winning a bet. Anticipating the wave of consolidation sweeping through the business intelligence software market, he correctly forecast Oracle's recent takeover of Hyperion and Business Objects' purchase of Cartesis. If IBM picks up Cognos, one of the last sizable pure-play BI vendors left standing, Jones will be three-for-three and 100 pounds richer.
The issue is of more than just sporting interest to Jones. Paragon, a specialist in business performance management technology, is a longtime partner of Hyperion and Cartesis. Like thousands of other VARs and solution providers, Paragon is navigating a rapidly shifting market and finding itself thrust into new vendors' partner ecosystems.
"The whole issue is around execution," Jones said. "If the mergers are well-executed, it's only going to accelerate the market. But the dynamics are changing. Now we have three megaplayers—SAP, Oracle and Microsoft—and two or three really big BI players."
Acquisitions aren't the only force reshaping the BI landscape. Driven by more stringent compliance regulations and an increasing enterprise focus on using IT to guide business-process improvements, companies are placing higher priority on deriving useful, user-friendly analytical information from their reams of corporate data. For the second year in a row, BI applications topped the list of technology priorities in research firm Gartner's annual CIO survey.
Sniffing market opportunity, application vendors are beefing up their portfolios in an effort to hang on to customers that would otherwise look elsewhere for analytics, forecasting and reporting tools. Microsoft is poised for a cannonball dive into the high end of the BI market later this year, when it ships the new PerformancePoint Server software it created by meshing its technology with applications acquired from ProClarity. Meanwhile, Oracle is shopping to supplement the powerful analytics software it got with its Siebel acquisition, and Business Objects is undergoing a comprehensive overhaul aimed at giving it the strength and scale to compete with the application giants.
Solution providers are already feeling tremors from the seismic shifts. To adapt to the new realities, some are eyeing new alliances: "It took a bit of time for Oracle to get their arms around how to sell BI, but this year they're coming on pretty strong," said Sid Banerjee, CEO of BI services firm Claraview, Reston, Va.
"Any company that wants to be in this space should look at them very seriously." Banerjee said his firm is likely to add Oracle to its partner network, which currently includes companies such as SAS, Business Objects and Cognos.
Others are bracing for the impact from Microsoft, Redmond, Wash. The company's marketing push—it hosted its first BI conference this month, headlined by Steve Ballmer—is attracting increased customer interest, resellers report. Golden Consulting Group in Bloomfield, Conn., recently began hosting "Dueling BI" seminars facing off wares from Microsoft and Business Objects, both of which it partners with. The debut event packed the room, Golden Consulting President Ken Dixon reports.
"Business Objects is still ahead of Microsoft, from a product and functionality standpoint, but I think Microsoft will attempt to scale up as much as they can," he said.
Microsoft's looming BI assault will reverberate throughout the industry. The company's deep pockets and monopolistic hold on corporate desktops give it a valuable beachhead. With so many customers already so heavily invested in Microsoft's infrastructure, the opportunity to maximize that back-office foundation and take advantage of users' familiarity with front-office applications like Excel is a strong selling point, VARs say—and those who have started kicking PerformancePoint's tires say it's poised for a strong start off the blocks.
Computer Generated Solutions (CGS) in New York is a longtime Microsoft partner that has two clients participating in PerformancePoint's early adopter preview program. Those customers have been favorably impressed by the software's ease of use and functionality, according to Helene Cole, CGS' vice president of product strategy. One, custom pool installer AnthonySylvan Pools, has cut from hours to minutes the time it takes to create custom reports on metrics like division profitability.
"My take is that Microsoft is in it to own this market and win. From our perspective, every prospect that we bring it up to is really intrigued by it. Customers are looking to leverage the Microsoft stack," she said.
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