Recession Proof? BI Software Sales Took Off In 2008

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The report also identified SAP, which acquired BI software vendor Business Objects last year, as far and away the market leader with nearly $2.1 billion in sales.

The 2008 sales were up 21.7 percent over $7.2 billion in 2007, a remarkable showing given the economic headwinds vendors faced all year during which the U.S. was officially in a recession and much of the rest of the world's economies were struggling.

The recession may be a two-edged sword for BI software vendors and their channel partners. Some prospective customers may delay product purchases as part of their overall cost-cutting efforts, but the need for companies to improve visibility into their business operations and gain control of their spending may be boosting BI software sales.

"In tough times, the first step is to increase transparency, which helps identify cost centers and then to more tightly align strategy with execution," said Gartner analyst Dan Sommer in a statement.

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The industry also has undergone a wave of consolidation in recent years and Sommer said part of the 2008 increase may have been due to vendors such as SAP, IBM (which acquired Cognos last year) and Oracle (which bought Hyperion in 2007) putting "a lot of focus and sales power behind their newly acquired BI products."

But the Gartner analyst doesn't expect 2009 sales growth to be as strong, given the ongoing recession and that some of the 2008 growth was "lowest-hanging fruit in up-selling products of an acquired company to an existing installed base."

Sales of BI platform software, which accounted for 65.3 percent of the total BI market, grew 20.4 percent in 2008 to $5.7 billion, according to Gartner. Sales of analytical and performance management applications, making up 34.7 percent of the BI market, grew 24.3 percent to $3.1 billion.

The report said SAS Institute is the BI market's second largest vendor after SAP with more than $1.28 billion in sales and market share of 14.6 percent. But Oracle is right behind with just $4.6 million less in BI software sales and the same 14.6 percent market share.

IBM followed those vendors with a market share of 11.3 percent, Microsoft with 7.7 percent and MicroStrategy with 3.2 percent. Other vendors with combined sales of nearly $2.8 billion made up the remaining 24.7 percent of the market.