Here's another thought related to the recent market consolidation: Systems integrators could be the big winners.
My logic: As the big enterprise software companies add to their portfolios by gobbling up pure-play vendors, they also dramatically increase product and platform complexity. So, while it might be easier (in some sense) to have a single supplier of software, implementation difficulty and cost will grow. User organizations lacking sufficient skills will heavily leverage SIs (even more than today) as they strive to quickly deliver quality applications to meet pressing business requirements.
Using basic micro-economic principals: the price of consulting will rise as supply is already constrained. Until supply catches up with demand, the SIs could be rolling in dough - with margins rivaling software products.
What do you think?
Wednesday, December 19, 2007
Wednesday, December 12, 2007
The ruckus about consolidation
I think most folks are keenly aware of the dramatic consolidation that has taken place in the BI market during 2007. In fact, there are only a handful of significant pure-play vendors left standing. these include: Actuate, Informatica, Information Builders, Microstrategy, SAS and SPSS.
When I was at Gartner, I observed ongoing consolidation in the market and viewed it as somewhat healthy - sort of a "pruning" of the "dead wood". From the 1990s and through 2005, most of those acquisitions were of smaller companies, not ones with revenues of $800M - $1.2B and market caps in excess of $3B.
The stage for this consolidation was set quite some time ago as the pure-play market matured and three dominant and sizable leaders emerged: Business Objects, Cognos and Hyperion. As other enterprise software markets cooled (e.g., ERP), BI and PM offered higher growth rates and margins. And, with all three of these in relatively good financial condition, any acquisition could be readily made accretive. So it came down to a question of when it would occur and who would be first. At Hyperion there was always a sense that once one fell, all would fall.
So what happens next? Well, I think we're in the midst of a fundamental paradigm shift where the rules are about to change and its not limited to BI or PM.
More on that later...
When I was at Gartner, I observed ongoing consolidation in the market and viewed it as somewhat healthy - sort of a "pruning" of the "dead wood". From the 1990s and through 2005, most of those acquisitions were of smaller companies, not ones with revenues of $800M - $1.2B and market caps in excess of $3B.
The stage for this consolidation was set quite some time ago as the pure-play market matured and three dominant and sizable leaders emerged: Business Objects, Cognos and Hyperion. As other enterprise software markets cooled (e.g., ERP), BI and PM offered higher growth rates and margins. And, with all three of these in relatively good financial condition, any acquisition could be readily made accretive. So it came down to a question of when it would occur and who would be first. At Hyperion there was always a sense that once one fell, all would fall.
So what happens next? Well, I think we're in the midst of a fundamental paradigm shift where the rules are about to change and its not limited to BI or PM.
More on that later...
Welcome!
Greetings and welcome to this new blog.
For those that don't know me, I've been in the Business Intelligence (BI) industry since 1989, when I coined the term "Business Intelligence" - defining it as "end user access to and analysis of data". I spent 13 years at Gartner, an industry advisory firm, where I was a Research Fellow and the lead analyst for BI. Then in 2005, I left and joined Hyperion as its Chief Strategy Officer. When Oracle acquired in May of 2007, I turned down their offer and became an independent industry resource, forming my own company, Dresner Advisory Services, LLC.
This forum is not intended to be limited to BI, but all related areas, including performance management. It is also not intended to be limited to vendors, products and software - but all issues which assist or hinder organizations in getting value from BI and performance management.
So once again, welcome. I look forward to hearing from you!
Howard Dresner
For those that don't know me, I've been in the Business Intelligence (BI) industry since 1989, when I coined the term "Business Intelligence" - defining it as "end user access to and analysis of data". I spent 13 years at Gartner, an industry advisory firm, where I was a Research Fellow and the lead analyst for BI. Then in 2005, I left and joined Hyperion as its Chief Strategy Officer. When Oracle acquired in May of 2007, I turned down their offer and became an independent industry resource, forming my own company, Dresner Advisory Services, LLC.
This forum is not intended to be limited to BI, but all related areas, including performance management. It is also not intended to be limited to vendors, products and software - but all issues which assist or hinder organizations in getting value from BI and performance management.
So once again, welcome. I look forward to hearing from you!
Howard Dresner