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Since its inception in the 1970s, BI was for the little guys. Lots of little BI companies. Some made it big for a while before being acquired, others went out of business. Small innovative specialists. Over the years there has been 100s, if not 1000s of little BI software companies. As time went by the cream came to the top of the milk and three little BI companies became $1Bn revenue best-of-breed champions: Business Objects, Cognos and SAS. Now there are two.
The BI market (and the software market as a whole) is starting to have the look of the automotive market. Before the war there were 100+ US car manufacturers. By year 2000 there were 5. Many of these manufacturers are still around and are run as separate Business Units by their larger owners. Skoda is one example. Interestingly, this is how Cognos will treat Applix (see Cognos acquires Applix) and how SAP will treat Business Objects. Conversely Oracle and Microsoft integrate their acquisitions into their organisations.
Thirteen months ago, in September 2006, I wrote CPM and BI: Market Trends Compared & Contrasted. In this article I detailed 34 “top” BI vendors: 8 enterprise applications vendors in both BI and CPM markets, and 13 best-of-breed vendors in each of BI and CPM markets. How many have the same financial ownership as 13 months ago? (A) = Acquired.
In both the Bloor BI report and the Bloor CPM report were Actuate, Business Objects (A), Cognos, Hyperion (A), Microsoft, Oracle, SAP, and SAS. Only in the BI report were IBM, ICS, Inflection Point, Information Builders, JasperSoft, MicroStrategy, Noetix, Panorama, Pentaho, Qliktech, Spotfire (A), SSA Global (A) and Temtec (A). Only in the CPM report were ALG (A), Applix (A), BoardMIT, Cartesis (A), Clarity Systems, CODA, Extensity (A), Longview (A), OutlookSoft (A), Pilot Software (A), Sage, SymphonyRPM (merged) and Teradata (spun off from NCR).
20 remain untouched (NB many are virtually untouchable – either too large to be acquired or privately owned); 14 have changed hands. The market has commoditised and consolidated. This becomes even clearer when we take a closer look at Oracle, SAP, and Microsoft’s BI acquisitions.
Oracle has acquired 15 companies – AppSource, Alcar, Arbor, Brio, Decisioneering, Hyperion, IMRS, IRI Software, PeopleSoft, Pillar, Razza, Sapling, Siebel, Sqribe and Upstream. SAP has acquired 11 companies – Outlooksoft, Pilot Software; and Business Objects’ 8 acquisitions – ALG, Cartesis, Crystal Decisions, Firstlogic, Next Action Technology, OLAP@Work, SRC and Inxight. Not forgetting SAPs own wide stable of BI products that include BPS, SEM, Integrated Planning, ECCS etc – and the same principle applies to Oracle. Even Microsoft (not knownuntil recently for multiple acquisitions) has acquired 4 companies (Maximal, Panorama, ProClarity and Stratature). 3 companies, 30 acquisitions, 100s of BI products, over 100,000 BI customers.
Of course there will always be BI niches available for small innovative companies like Tableau and Qliktech. But most large enterprises will eventually standardise on the perceived low risk enterprise applications “stacks”, of which BI will be one component, of the giants – SAP, Oracle and Microsoft. Like the car market, the BI market will be a less exciting and vibrant place but hey, that’s business.
As for the SAP / BO deal, Philip Howard has already made some interesting comments in his article Business Objects and SAP: the good, the bad and the ugly. It is a shame – BO was doing some really interesting things as I detailed in Business Objects sharpens up their act to impress the market. SAP’s share price dropped 5% on the news of the Business Objects acquisition so the synergies cannot be so clear. But at least the acquisition will bolster SAP’s flagging efforts in the BI market. Will IBM finally pluck up enough courage to acquire Cognos? It’s now or never . . .