Corporate manoeuvrings over the past few months have seen a significant consolidation in the business intelligence space.

Major ERP vendor SAP has bought long established BI specialist Business Objects while IBM has acquired another big BI name, Cognos. Earlier in 2007 Oracle snapped up performance management software specialist Hyperion Solutions.

What do these mergers mean for organisations contemplating the purchase of a business intelligence solution? As the dust settles on the acquisitions in 2008, customers are likely to be offered sweeter deals from the big vendors who can now offer more integrated solutions to organisations shopping for a BI component to bolt onto their existing ERP and data assets.

Put simply, business intelligence is the process of increasing an organisation’s competitive advantage by making intelligent use of its available data in decision making.

Over the past few years BI has evolved from being a niche activity, understood and controlled by only a few specialists within the organisation, to being a mainstream, more easily accessible function. Its potential to offer businesses a real competitive edge in the market has seen it rise up the list to be near the top of corporate IT requirements.

While in the past BI solutions have been the domain of specialist vendors, this increased corporate interest has attracted the attention of the world’s big name IT vendors who have snatched up BI providers in a bid to provide their customer base integrated offers which includes BI functionality.

End-to-end solutions
“The point of these acquisitions, I believe, is that the market is very much heading towards vendors being able to offer end-to-end solutions,” says Richard King, BI and ERP practice principal for HP Consulting and Integration.

King says vendors such as Oracle and SAP are gearing up to offer customers integrated solutions that are either “functionally aligned” – in other words provide a depth of intelligence within areas of the business such as HR or finance – or are “vertically aligned,” meaning they offer a deep solution specific to meeting the needs of organisations within defined industries, such as the telecommunications or manufacturing sectors.

“Most medium to large organisations have their data in a variety of disparate systems. It’s unlikely to be in one ERP,” says King.

“So a lot of effort goes into creating a data warehouse and integrating that data into one store. It’s been quite difficult until now for any one vendor to offer a one-size-fits-all solution mainly because there have been so many source systems, so it’s been impossible to offer a solution that meets all the requirements. But I think as BI has matured it’s really consolidating to the point where it’s focused on solutions for verticals or horizontals.”

He says this consolidation has the potential to provide organisations with strong productivity gains.

Agnostic versus alliances
However, independent BI solution say their specialist solutions offer customers a powerful alternative to the endto- end propositions being worked up by the major vendors. One such independent BI vendor is iQ4bis.

“The way we look at these acquisitions [by Oracle, SAP, etc.] is that they have actually helped independent companies like us,” says Sunesh Samarasinghe, iQ4bis’s Asia- Pacific general manager.

“Because we are ERP-agnostic we have no favourites. In the past the resellers of those ERP solutions could have said that but now they can’t because there are clearly-defined alliances.”

He also argues that iQ4bis’s sole focus on BI is reflected in the quality of the solution. “There were times when vendors used to try and do everything for everybody, but as independent business intelligence providers we have said we don’t build ERP solutions. There are very good ERP solutions out there. What we do we do very well and that’s all we do. So to that extent these acquisitions have helped us tremendously as independent guys.”

Too many technologies?
Sebastien Marotte, Oracle’s Asia-Pacific vice president of enterprise performance management and BI, says the consolidation currently happening in the BI space has similarities to the trend across ERP market over the past decade, which has seen a reduction in the number of major vendors.

“What is happening right now, because of the diversity of players that we had in the past, CIOs are a little bit tired of having too many technologies cross the board,” says Marotte.

“So they really want to lower the cost of ownership and they want to base their BI investment on one single platform, or less players to reduce the cost of implementation, the cost of training and to roll out the solutions faster, especially since companies are doing a lot of acquisitions, so they want their BI investment to be pluggable into their existing systems, so the less technologies they have the better.”

He says BI’s popularity relates to organisations’ growing demand for more visibility into their data. As markets become more competitive, accurate planning and forecasting is becoming both more important and more complex. “We are seeing a lot more new applications around forecasting, planning and budgeting in additional to the traditional BI applications, which were more around monitoring or measuring activity.”

Integration
Marotte says the Hyperion acquisition was about Oracle wanting to provide the best integrated ERP/BI solution possible and the purchase was paying off with existing Oracle customers now extending their investment into BI. However, the goal was also to target Hyperion at organisations who were not currently Oracle customers but were looking for a BI solution, he said.

Moving quickly to put a product roadmap, setting out Oracle’s plans for integrating Hyperion into its business, in front of customers had been a key factor in ensuring the success of the acquisition, he said, because customers wanted a clear view and certainty around future product development.

HP’s King says the integrated ERP/BI offerings from the larger vendors are likely to offer cost advantages to customers. “The large vendors can probably come up with a more competitive licensing model,” he says.

“There’s also pre-built integration so the implementation costs will go down. The speed to implement will go down, and consequently will cost less to implement. And you would imagine – if you’re implementing a reasonably vanilla solution – that your support costs would be lower as well. That’s what this market consolidation will probably help achieve in the long run.”

Another interesting element in the evolving BI mix is Microsoft’s increased push into this particular market. Recent Microsoft launches have positioned the company as offering a stronger end-to-end BI solution meaning it has the potential to capture a larger share of the market over the next few years.

For more information, vendors, resources and case studies visit the Business Intelligence Research Pavilion and the ERP Research Pavilion

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By Simon Hendery