2009 Magic Quadrant for BI Platforms

This document was revised on 5 February 2009. For more information, see the Corrections page on gartner.com.

The Magic Quadrant for Business Intelligence Platforms (see Figure 1) presents a global view of Gartner's opinion of the main software vendors that should be considered by organizations seeking to develop business intelligence (BI) applications. Buyers should evaluate vendors in all four quadrants and not assume that only the largest organizations can deliver successful BI implementations. In addition to Gartner analysts' opinions, the scores and commentary in this document are based on three sources: customer perceptions of each vendor's strengths and challenges derived from BI-related inquiries with Gartner, an online survey of vendor customers conducted in late 2008 yielding 480 responses, and a vendor-completed questionnaire about their BI strategy and operations.

Market Overview

In January 2008, SAP completed its acquisition of Business Objects and IBM completed its acquisition of Cognos. The acquired firms were two of the largest in the market and had, arguably, been the defining suppliers in the space. Their absorption into larger entities (along with Hyperion into Oracle six months earlier) seemingly marked the end of BI platforms as a predominantly stand-alone, best-of-breed, buying decision. In 2008, BI platform investment decisions became tethered more closely to strategic sourcing and stack-led factors, and more influenced by organizational relationships with application and infrastructure vendors than before. Conversely, however, based on the research conducted for this report and interactions with Gartner customers over the year, there clearly remains a demand for independent BI platforms. To understand this duality, it is necessary to consider a number of factors at play that are driving the BI platform today:

1. A growing bifurcation of buying preference. There are two types of buying behavior evident: A) firms that see their BI platform as an extension of their enterprise middleware, and require the platform to fit into more heterogeneous data and application sources; and B) those with an inclination for pre-integration of a BI platform into a stack of data and application sources from a single vendor.
2. Innovation yielding to integration. One consequence of the market's consolidation has been that the acquiring megavendors' product releases and road maps have inevitably been dominated by integrating the acquired technologies into their existing portfolios. These vendors face a challenge balancing the conflicting goals of making the BI platform better at working together with the vendor's other products, while at the same time not becoming too inward facing. In the main, innovation in BI platforms is being driven by independents.
3. "Flattening" alternatives. The maturing of Microsoft's lower-cost BI portfolio, the application of Web 2.0 techniques, the availability of data warehouse (DW) appliances, the growth of open-source BI and the ongoing emergence of software as a service (SaaS) offerings have continued to make BI capabilities increasingly accessible and more affordable. As a result, this Magic Quadrant includes commentary on some alternative vendors which, while not meeting the inclusion criteria for the Magic Quadrant itself, offer a viable alternative for some BI use cases.
4. The re-emergence of "workgroup BI." Many of the pioneering vendors of the BI space entered the market delivering personal and workgroup-based BI. After much encouragement from their clients and from analyst firms (including Gartner), these vendors began to focus most of their resources on delivering enterprisewide BI solutions. This left an opening for a new crop of vendors to deliver solutions for personal and workgroup BI requirements using disruptive technology (specifically in-memory analytics). It seems likely that despite the inherent risk of silo-perpetuation, workgroup BI's light-touch nature will prove attractive in a recession.
5. Return on investment equivalence. Based on conversations with Gartner customers, and the survey carried out for this research, beyond the capability to meet the needs of international deployments, there is no correlation between the size of a vendor (in either revenue or staff terms) and the level of satisfaction or the return on investment delivered with a BI platform implemented. Formerly, while the market was dominated by independent pure-play BI firms, size was an important indicator as to capability; now, this isn't the case — a $300 million revenue BI specialist may well (and often does) out-deliver a more broad-based vendor many times its size. This apparent equivalence in the relative level of success delivered is reflected in the Ability to Execute axis positions in this year's Magic Quadrant.

After the vendor merger and acquisition (M&A) turbulence of 2007, 2008 was a year of transition. And 2009 is likely to be a critical year in which the total cost of ownership (TCO) of BI comes under increased scrutiny, and its value as a decision-making tool in the toughest economic conditions is put to the test.

Forecast

Gartner's view is that BI platform revenue will be less affected by the economic downturn than some other technologies because of the heightened need to make better, fact-based decisions — BI is a vital competitive tool of increased importance in an environment where doing business more smartly, in order to maximize share of the reduced revenue in circulation, is a necessity. That said, however, the recession, commoditization and consolidation are expected to put BI platform growth into the single digits in 2009 and beyond. As such, the BI platform market's compound annual growth rate (CAGR) through 2012 is expected to be 7.0% for stand-alone BI platforms and 7.9% for both stand-alone and embedded functionality (for details and an explanation of terms see "Forecast: Enterprise Software Markets, Worldwide, 2007-2012, 4Q08 Update").

Several demand-side factors indicate that BI platform revenue will continue to grow:

* CIOs are increasingly being required to invest in technologies that drive business transformation and strategic change. The fact that BI is a top priority for CIOs indicates that they see BI as part of the answer to this requirement. BI can deliver on this promise if deployed successfully because it could improve decision making and operational efficiency, which in turn drives the top line and the bottom line.
* Information generated from enterprise applications is at an all-time high and will continue to increase. BI platforms are seen as a means to turn that information into an asset on which better decisions can be made.
* BI platforms are expanding their capabilities beyond traditional query, reporting and online analytical processing (OLAP) functionality, toward providing dashboards, scorecards and visualization as well. We expect innovation and growth to come from technologies that make it easier to build and consume BI applications (such as visualization, search, in-memory analytics, SaaS and service-oriented architecture [SOA]).
* Smaller and midsize organizations are becoming an important target market for BI vendors, with a large proportion being new opportunities. The success of smaller vendors targeting the segment, new SaaS delivery models and increased offerings from Microsoft are prompting further growth in demand. In addition, several vendors traditionally not in this domain have been modifying or extending their product, pricing and partner strategies to reach this key group.
* While BI standardization projects are increasing, departmental projects are also on the rise, especially those provided by smaller horizontal analytics specialists and within emerging technologies, such as in-memory BI, search and visualization.
* Areas that have traditionally been under corporate performance management (CPM), such as business planning and forecasting, are increasingly being embedded with BI capabilities. This, together with a trend of embedding analytics into business processes, will drive further investment in BI.
* Consumerization of information — Users are becoming increasingly savvy in using and manipulating information to their advantage. This will enable a spread of BI across organizations, leading to a need for more licenses. Technology trends, such as increasing visualization, might help further.
* Another positive driver is the use of BI functions in customer-facing Web site applications as a value-adding service differentiator, using Rich Internet Application (RIA) techniques.

Source: gartner.com