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The Analytic Beat Goes On

The analytic tools of today are a lot different from the bread-and-butter OLAP offerings of yesterday. The analytic tools of tomorrow will differ still more.

It’s a good time to be in analytics. That’s the upshot of new research from International Data Corp. (IDC), which found that unabated uptake of performance management (PM) and business intelligence (BI) analytic solutions is driving double-digit market growth.

The analytic solutions of today differ significantly from the bread-and-butter OLAP solutions of yesterday. For one thing, IDC says, analytic technologies increasingly incorporate data access and data integration technologies—largely to facilitate access to structured data and unstructured content alike. In addition, the researcher notes, today’s analytic tools are outfitted with business process management, collaboration, and workflow management capabilities.

According to IDC, no analytic vendor can afford to rest on its laurels, and few are. “As consolidation among the leading business analytic vendors continues, a new generation of software vendor will target specific vertical market segments with innovative new solutions,” write Dan Vesset and other analysts in a new IDC market forecast. “These solutions will include not only functionality innovation but also business model innovation, with such offerings as open source and software-as-a-service business analytics.”

Last year, the market for business analytic solutions grew at a healthy 11.2 percent clip, approaching $20 billion in revenues, according to IDC. The value of PM tools and applications ($13.6 billion) was nearly double that of DW platform tools ($5.7 billion). Even without factoring in its acquisition earlier this year of the former Hyperion Solutions Corp., Oracle Corp. is the overall analytic market champ, controlling 14.2 percent of the market. Based on 2006 figures, Hyperion’s share—3.5 percent—would have bumped Oracle up to more than twice that of SAS Institute Inc., its nearest competitor.

SAS—with its 30 years of analytics expertise—is no slouch, either. It controlled 8.2 percent of the overall analytic market in 2006, growing its share by 14 percent. That outstripped the performance of nearly every other analytic competitor—with the exception of Microsoft Corp., which grew its fifth place share by nearly 25 percent, largely on the strength of its new SQL Server 2005 database, which ships with an enhanced version of its Microsoft Analysis Services OLAP engine and data mining toolset.

Clocking in at third place was SAP AG, which grew its share by 12.6 percent—fourth best among all analytic vendors. IBM was fourth, with growth (12.0 percent) that outpaced the analytic market entire.

Transforming the Market

As the market evolves and continues to consolidate over the next few years, IDC expects those positions to change. Moreover, Vesset and company cite a number of market drivers they believe will transform the analytics market over the next several years. The first of these, IDC argues, is a growing need to access semi-structured and unstructured information.

“As the awareness of the potential of business analytics solutions to influence performance increases, the need to combine structured transactional data with various other forms of unstructured, semi-structured, and rich media content becomes acute,” Vesset and his IDC team write.

This jibes with a recent survey from TDWI Research, which found that—even though the vast majority of the information consumed by today’s data warehouses is structured—unstructured or semi-structured data typically accounts for up to one-third of mission-critical data in any given organization. According to TDWI researcher Philip Russom, organizations will increasingly work to expose unstructured data sources—chiefly by means of BI search and text analytic capabilities—such that they can in turn be consumed by well-ordered data warehousing processes.

Usability is also key. DW, BI, and, lately, PM tools have typically been the province of statisticians, business analysts, and other end-users. That’s finally starting to change, according to IDC. The upshot is that more organizations are exposing BI and PM capabilities to non-traditional user constituencies—in many cases, by embedding analytic capabilities into conventional (or non-analytic) tools.

“Traditionally, the business intelligence tools market has addressed the needs of business and quantitative analysts, with less attention paid to managers and supervisors, line-of-business staff, and stakeholders external to an organization,” Vesset and company write. “To achieve pervasive business intelligence, end-user organizations and technology vendors will have to rethink their approaches to technology deployment by taking into account expectations that users have for information access and interactivity on the Web and by embedding business analytics functionality into operational applications.”

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