Business intelligence is certainly a good area to be in right now, expanding faster than any other area of the enterprise application landscape. According to Gartner, the business intelligence market (including data warehouses and CRM analytics) is growing nine percent per year. While it was worth $57 billion at the end of 2010, it will surge to $81 billion by 2014 and as high as $136 billion by 2020.
Of the $57 billion, $30 billion) comes from business intelligence services, a further $10.5 billion from BI platforms/analytics and $10.5 billion from data warehousing.
Gartner analyst Rita Sallam said that by 2020, business intelligence analytics would become pervasive.
“Analytics is the combustion engine of business, and it will be necessary for organizations that want to grow, innovate and optimize efficiency,” she said. “Given its far-reaching impact, it is one of the few software markets that thrive even in adversity.”
She estimates that today about 30 percent of users deal with analytics, but said that number will rise to about 50 percent by 2014 and 75 percent by 2020. Not surprisingly, Gartner CIO surveys consistently rank business intelligence and analytics ahead of such areas as mobile and cloud in terms of overall priorities.
Sallam said that while the IT core of business intelligence will remain strong, Gartner is beginning to see a shift in buying toward lines of business in the hands of marketing, finance and supply chain.
Decline of the Business Intelligence Stack
Sallam said mega vendors IBM, SAP, Oracle, Microsoft and SAS still own the dominant share of the business intelligence market. SAP leads in business intelligence platform revenue, while Oracle is ahead in performance management suites and SAS in analytics.
“Every market that we've seen, the mega vendors have acquired the leaders,” said Sallam. “Mega vendors own two-thirds share today versus one-third in 2007. But the area of analytics is still an open playing field.”
Data discovery vendors such as QlikTech, Tableau and Tibco Spotfire grew more than the others, Sallam said. A marketplace where multiple business intelligence tools are the norm likely means they will continue to see strong growth.
“A stack-centric mentality and single vendor standardization policies won't cut it,” she said. “Understand that your organization needs a portfolio of analytic capabilities.”
She made a point of differentiating between the idea of selecting a single business intelligence vendor and establishing business intelligence standards. The way she sees it, standardization is becoming less about using the same toolset and more about employing specific tools, metrics, and processes for certain capabilities and use cases.
This shows up in a decline in the number of users identifying vendors as their business intelligence standard. All the mega vendors experienced a drop, some by as much as 19 percent in only three years.
Demographics Drive Data Discovery
Another area that is changing the business intelligence market is demographics. Millennials (ages 20 to 30) now comprise 20 percent of the workforce, but their ranks will swell to 40 percent by 2020.
“The graduating high school class of 2011 spent all of their school years with pervasive access to the Internet – they don’t know a world without information at their fingertips,” said Sallam. “You tell them to go to the library to use the card catalog, and they look at you if you told them to go use an abacus to calculate the square root of 1,058.”
These younger employees are driving the consumerization of IT, which includes how business intelligence is delivered. They want business intelligence to be as intuitive, social and collaborative as the tools in their personal life.
Thus traditional reporting and ad hoc query are flat or declining, whereas data visualization in dashboards and interactive visualization are experiencing growth. “BI is becoming more visual as data discovery needs intensify,” Sallam said.
The data discovery market will rise from $591 million currently to $1 billion by 2013, Sallam said. Data discovery tools typically include a mix of in-memory analytics, data mashup capabilities, dashboards, self-service delivery, light footprint and speed of deployment. These tools have become so popular that established vendors are copying them.
Demographics are also contributing to the growth of mobile business intelligence. Gartner predicts that 33 percent of analytics will be consumed on handhelds by 2013. By the end of this year, 55 percent of organizations using business intelligence either have or plan to deploy mobile BI. As a result, mobile BI projects will outnumber traditional workstation projects by four to one within three years. This has everything to do with competitive advantage.
The Rise of Predictive Analytics
Analytics have traditionally been employed to track and visualize performance using conventional measures. This could be summed up as looking to the past to gain an assessment of how the organization has been doing. Gartner predicts the next big phase for business intelligence will be a move toward more simulation and extrapolation to provide more informed decisions.
Gartner calls this field advanced analytics and defines it as the analysis of structured and unstructured data using statistics, descriptive and predictive data mining, simulation and optimization to produce insights that query and reporting tools are unlikely to discover.
“It is frequently applied to make decisions, solve business problems and identify opportunities by providing better forecasts, causal understanding, pattern identification, process and resource optimization, and by assisting with the scenario planning process,” Sallam explained.
Gartner surveys show most users still focus on measurement of the past, with only 13 percent of users making extensive use of predictive analytics. Less than 3 percent use prescriptive capabilities such as decision/mathematical modeling, simulation and optimization.
“This trend is changing as organizations express an interest in increasing their use of advanced styles of analytics,” said Sallam. ‘This can help organizations anticipate such things as who is likely to reenter a hospital or which claims are likely to be fraudulent.”
She advises organizations to develop a plan to support new data volume, variety and velocity requirements. By being able to correlate, analyze and present insights from structured and unstructured information, organizations will be able to personalize customer experiences and exploit new opportunities.
“Those that can do advanced analytics on top of Big Data will grow 20 percent more than their peers,” said Sallam. “The explosion of data volume, as well as its variety and velocity, will enable new, high-value advanced analytic use cases that drive growth and productivity.”
Drew Robb is a freelance writer specializing in technology and engineering. Currently living in California, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).