Blog: William McKnight

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Framework Purchasing in Business Intelligence over the next few years

A trend I anticipate to start in 2008 is a byproduct of the enormous M&A activity that has taken place, and will continue to take place. That trend is what I call “framework purchasing.” Many end user organizations, and more to come, when they are rounding out their technology stack, will have to highly consider chiefly the offering from one of the mega-vendors already in their shop and align with their emerging platform (note I didn’t say standard.) There will be tool replacements as well as these vendors drive cross-selling with discounts and the lure of tool integration, the latter of which will take some time.

Consider that with their respective buying sprees, SAP, Microsoft, IBM and Oracle are approaching, or at, complete stacks for not just business intelligence, but enterprise software as a whole. Consider the rich application stack of Hyperion and its data access tool combined with Peoplesoft, JD Edwards, Siebel, Retek, Agile, G log and Demantra. Of course, I just used the “old” names. I guess I am being a little nostalgic. Not to pick out the new Oracle stack here necessarily. IBM, Business Objects and Microsoft have similar stories to tell. However, as the mega-vendors have been busy filling out their gaps and we prepare to draw our collective breath, has anyone noticed SAP does not have its own DBMS? As well, the DBMS market is about as rich with supply as it has been in a decade.

Of those DBMS vendors, one has bought a tremendous amount of time and a place at the table and that is Teradata. Teradata and SAS, jointly, appear to want to be a major player here, with a partnership forged in Q4 that gives buyers an alternative. Teradata’s strategy (and architecture extensions) of extending the data warehouse back into the operational arena appears to be paying off as they are advancing with the industry. One more player in all this, possibly the most upset by all the M&A activity, is Hewlett Packard. Wither HP and their big plans for NeoView? Teradata and/or HP could use a Microstrategy or an Informatica if interested in getting into this emerging big name short list.

The acquisitions of 2007 will bring out the iconoclastic in some client companies who will want to keep all their vendors on a short rope and will continue to think best-of-breed. The entire BI market will rise over the next decade so startups, best-of-breeds and open source vendors that have vision, focus and a message should still do well in the margins of the big guns.

I think the business books in 2018 will look favorably on the recent moves of SAP, Microsoft, IBM and Oracle. The signal that BI had evolved to this point in maturity was when Oracle bought Hyperion. However, I don’t expect the recent acquisitions to impact clients for quite some time. If I could effect a yawn with words, I would do it here.

So, if they haven’t already, end user companies should begin to look ahead and figure out who they want to be in their approach to the market – a mega-vendor purchaser with a relationship and a commensurate built-in culture or a company who values independence and will incubate their own culture. I believe 2008 will start to bring back the notion a “primary” vendor.

Technorati tags: DBMS, data-warehouse, business-intelligence, SAP, Oracle, IBM, Microsoft

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