subscribe: Daily Newsletter

 

BI spending set for 11% growth

0 comments

Despite major consolidation among business intelligence (BI) vendors in 2007 and growing fears of an upcoming economic slowdown, BI platforms are expected to continue to grow at a strong rate. 

According to Gartner, the worldwide market for BI platforms is forecast to reach $5.8-billon in 2008, an 11.2% increase from 2007. Worldwide BI platform revenue is forecast to grow at a compound annual growth rate (CAGR) of 8.1% through 2012, to reach $7.7-billion in 2012.
Gartner analysts expect BI platform revenue to be less affected by an economic downturn than some other technologies because of the high priority BI platforms hold with CIOs. BI was the top technology priority in 2008 in a worldwide survey of 1 500 CIOs by Gartner Executive Programs.
“The fact that BI has held the top spot with CIOs in this survey for three years running makes us believe that BI will be more resilient against the effects of a possible downturn in IT spending than some other technologies,” says Dan Sommer, senior research analyst for Gartner. “Furthermore, the survey indicates that CIOs are looking to increase their budgets for BI by about 11% this year.
“Despite BI being a top priority for 2009 and beyond, we expect a downward-spiral growth projection because of product and vendor consolidation, which will be offset somewhat by larger sales forces behind some of the products,” says Sommer. “Commoditisation of BI across the board, but in particular for query, online analytical processing and reporting, will drive price points down. This will be partially offset by newer, innovative BI capabilities, as well as the general proliferation of BI, allowing it to reach more users within organisations.”
2007 saw a turbulent shakeout of BI vendors, with Microsoft growing its capabilities, and Business Objects (SAP), Cognos (IBM) and Hyperion (Oracle) being the most notable acquisitions of the year, resulting in a new playing field, dominated by these mega vendors.
Growth in 2007 has been partly inflated by Europe, the Middle East and Africa (EMEA), in which the strong euro has caused a boost of global growth rates when reporting in dollar terms. Overall for 2007, in dollar terms, EMEA and Asia/Pacific displayed stronger growth rates than North America, and they are expected to do so again in 2008.
Given the recent weakness of the US economy, the technology market in North America is expected to see low growth for the first half of 2008. Much of the early weakness will be from organisations exercising caution in spending their budgets being prepared for a quick pullback should the economic situation decline more rapidly or severely than currently expected.