RESEARCH & RESOURCES

A Rising Big Data Analytics Tide Lifts Some Boats

If IDC's forecast pans out, sales of analytic and big data software will be one of the few bright spots in an otherwise slumping global market for enterprise software.

A recent forecast update from International Data Corp. (IDC) has encouraging implications for business intelligence (BI) and analytics.

If IDC's forecast pans out, sales of analytic and big data software will be one of the too few bright spots in an otherwise slumping global market for enterprise software.

IDC significantly revised its year-over-year growth projections for the worldwide software market, dropping its forecast by almost 25 percent -- from the 5.7 percent (year-over-year) growth rate it projected back in May to an anemic 4.3 percent.

The market watcher blamed the downgrade on "an important currency exchange rate depreciation in the Japanese yen" that was announced in Q2. On the plus side, this sounds worse (or more significant) than it is, IDC explained: measured in terms of constant U.S. dollars, growth in demand for enterprise software in 2013 should still track very closely with IDC's original projections.

Henry Morris, senior vice president for worldwide software, services, and executive advisory research with IDC, says that demand for analytic and big data software has helped to buoy sales of enterprise software. Companies aren't adopting analytic or big data software without rhyme or reason, of course; according to Morris and IDC, demand for analytic or big data management software is linked to growing demand for social/collaborative software-as-a-service offerings.

In other words, the more that people use social and collaborative tools to interact with one another (or, for that matter, with potential purveyors of goods and services), the more information they generate. Organizations want to study and analyze this information so they can better understand, anticipate, and profit from customer behaviors.

"Leveraging the social dimensions of the Internet keeps fueling the collaboration growth, much of which is in the form of software-as-a-service. This is complementary to the increased attention to big data and analytics solutions, which help enterprises to understand and act on anticipated customer behavior and provide new insights into product reliability and maintenance," said Morris in an IDC press release.

The upshot, according to the firm, is that demand for collaborative and analytic software will increase significantly over the next half decade, with revenue growth pegged at a compound annual growth rate of 8 percent. Included in the "analytic" category is what IDC dubs "Structured Data Management Software and Data Access, Analysis and Delivery solutions," a big-tent technology segment that includes relational databases and ETL tools; traditional BI and BI discovery products; predictive analytic and machine learning technologies; and NoSQL platforms such as Hadoop.

There's hope in other software segments, too. For example, IDC projects that sales of apps such as CRM, supply chain management (SCM), and enterprise resource management -- among others -- will grow at about a 6 percent clip over the forecast period. This, too, has BI and analytic implications: in the late-1990s, adoption of ERP, SCM, and CRM applications produced a significant number of applications, most of which (ultimately) became grist for BI reporting and OLAP-driven analysis.

Finally, IDC points out, applications that once were thought to be vertical-specific -- such as commerce -- will start to be deployed across verticals, such that companies in manufacturing or in the public sector will license and deploy commerce software.

"Enterprises are starting to implement applications that either didn't exist or weren't needed in the past, such as commerce applications in all industries, not just retail, but also manufacturing, hospitality, food and beverage, and even the public sector," said Christine Dover, research director for enterprise applications and digital commerce with IDC, in a statement.

"IDC is also seeing applications in categories that didn't exist in the past [e.g., subscription billing, spend optimization, and revenue management] for requirements that may have been met using custom applications or manual processes," she explained.

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