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And Then There Were 4 -- IBM, SAP, Oracle, and Microsoft account for about half of the $7 billion business intelligence market. All four are pitching enterprise-wide BI platforms, each with its own twist. Here's what you need to know to choose.(Information Week Via Thomson Dialog NewsEdge) Last year, it was about massive consolidation in the business intelligence market. This year, it's about making decisions. The four largest vendors are promising the world: "Need an entire infrastructure for all of your BI and data management needs? We've got it. Want to give hundreds more employees the power of business intelligence? We can do that, too." They each want you to buy their vision of a BI platform. Understanding their strategies will help you decide whether to listen or walk away. In one short year, Oracle acquired Hyperion, SAP bought Business Objects, and IBM grabbed Cognos. Including Microsoft, the big four BI vendors now account for about half of the $7 billion-a-year BI tools market, which is expected to grow 11% this year, according to IDC. Now the big four are crafting platforms that will provide customers with enterprise-wide approaches to BI software, encompassing all of the IT systems involved in delivering relevant information to users. They're improving the integration of conventional BI tools-query, reporting, and dashboards-with the other software they sell, including databases, middleware, enterprise applications, and collaboration software. At the same time, they say they'll continue to develop and support BI tools that integrate equally well with their competitors' software. Don't believe it. Vendor development teams will have to be selective about where to spend time and money, and you can bet their company's products will come first. Oracle, IBM, and Microsoft will push you to buy both their databases and BI tools, but beware of depending too much on one vendor. "CIOs want vendors that don't lock them in and give them flexibility," says Michael Saylor, CEO of MicroStrategy, among the last of the independent BI vendors. Of course, he insists that "an independent platform is the most credible choice." But using your main software or database vendor to build a BI platform also has advantages. They can help piece together the broader technology puzzle to support a company-wide BI initiative and minimize the number of vendors you have to manage. You'll need to evaluate the vendors against your own view of what makes a great BI platform. Does everything stem from the power of the database? Then Oracle or IBM might make the most sense. Do you want to give users more ways to analyze data in your transactional systems? Then take a look at SAP. If the CFO is the primary user, that's where Oracle and SAP are strong. Concerned about data quality and management? IBM has expertise there. If you need to get BI into the hands of a broader range of employees, Microsoft could be your best bet. Whether it's from one of the big four or an independent vendor, adopting a standard BI tools platform makes sense. "There are a lot of BI weeds that have cropped up in organizations, hitchhiking as part of another application," says Gartner analyst Bill Hostmann. That leaves managers trying to compare reports across applications that have different data models and vocabularies, he says, and "it becomes impossible to get a view across the business." All four vendors have talked about pushing BI tools out to more types of users, but Oracle, IBM, and SAP will need to lower their pricing if they want to compete with inexpensive open source providers like Pentaho and entry-level tools that are gaining more capabilities, such as the Google Docs spreadsheet. Tools from IBM-Cognos, Oracle-Hyperion and SAP-Business Objects typically cost well over $1,000 per user. Microsoft has adopted a pricing structure to make the cost per seat decrease as the number of users increases, charging $20,000 for PerformancePoint Server 2007 and $195 per user. The first step in developing a BI platform that encompasses databases, enterprise apps, and other systems is deciding whether to go with one of the big four. To help with that decision, here's a look at their technologies and strategies. IBM'S ALL ABOUT THE DATA IBM's view is that business intelligence is best handled by a data specialist. The company has leveraged its strength in databases and middleware as a foundation, adding numerous acquisitions of software for cleansing, managing, and organizing data. Its $4.9 billion Cognos acquisition, completed in January, was the culmination, providing the tools for accessing and analyzing data. Cognos is critical to IBM's big and expensive Information On Demand strategy, launched two years ago by Steve Mills, senior VP of software, and spearheaded by Ambuj Goyal, general manager of IBM's Information Management software division. Before the purchase of Cognos, IBM had funneled several acquisitions into this strategy, including Ascential, a data integration software vendor IBM bought for $1.1 billion, and FileNet, a content management vendor it got for $1.6 billion. IBM's OmniFind search products also are part of Information On Demand. IBM is positioning itself as the go-to megavendor that can help customers create a company-wide information architecture, from the desktop down to the bowels of the data repositories. But BI tool-buying decisions are typically made based on application functionality and not how well they work with data management systems. IBM's approach forces IT departments to consider not just what users want from BI tools, but how they integrate with the search, content management, master data management, data cleansing, data warehousing, and data integration systems to form a cohesive whole. Whether this is the right focus will be determined by how the majority of companies end up deploying BI, says Gartner's Hostmann, who calls IBM's strategy an infrastructure approach. "At some point, this will become a tipping point inside organizations: the application-centric approach versus the infrastructure-centric approach," he says. While IBM works this strategy, it also will try to convince customers that they shouldn't be looking to application vendors such as SAP for BI expertise. Application vendors are specialists at automating processes and transactions, but not at understanding data, says Rob Ashe, who was CEO of Cognos when it was acquired and retains that title as head of IBM's Cognos unit, reporting to Goyal. IBM's information architecture approach is ambitious. It helps that IT and business units aren't used to buying BI tools from their enterprise applications vendors. IBM also has an advantage with customers concerned about vendor lock-in. Businesses typically want to have a combination of transaction software from various vendors, and since IBM has been a "neutral player," it isn't going to show favoritism toward any one enterprise app, Ashe says. In the coming year, Ashe says Cognos technologies will be tied more closely to a "treasure trove" of IBM capabilities and products. One plan is to tap into the company's extensive work in natural language processing to develop new products and capabilities for analyzing unstructured data, such as e-mails and customer service transcripts. IBM also is creating more collaborative BI capabilities by tying Cognos to Lotus Notes. "There's a lot of smart thinking and research going on in how this will all work together in a social environment," Ashe says. But did IBM get the best BI vendor when it bought Cognos? That's debatable. After Business Objects, Cognos is the second-largest vendor in reporting and analysis tools sales ($622 million in 2006, according to IDC), making it a popular platform among BI specialists. With Cognos 8, launched in November 2005, the company brought to market its first integrated BI suite, far improved in terms of integration and scalability. Older Cognos products didn't work well together and lacked a common look and feel, says Simon Gratton, director of business transformation at Telus, a $9 billion-a-year Canadian telecom company that's migrating from a hodgepodge of BI tools to company-wide use of Cognos 8 for analyzing data from SAP Business Warehouse, IBM DB2, and Oracle databases. Cognos 8 looked like it's "truly intending to deal with information needs on an enterprise basis," Gratton says, with dashboards and scorecards that deliver views personalized to job roles. Regarding the marriage with IBM, Gratton says it's too early to say how it will benefit Telus, but he sees potential, especially in using Cognos with IBM's middleware and federation tools to make data more usable for analysis. Sounds like the seeds of an information management architecture. If IBM's vision of how these various layers of data management link together makes sense to you, it could be the BI platform you're looking for, particularly if you already have investments in IBM databases, middleware, or Cognos tools. SAP: TRANSACTION DATA'S THE KEY For SAP, the biggest opportunities are in using BI to get more insight from data in ERP and supply chain management transaction systems, rather than from data that's been sitting around for days or weeks as it's moved into a data warehouse. That means not just tapping into SAP applications, but also those of its top competitor, Oracle. SAP has gone out of its way to insist it will treat Business Objects, acquired in January for $6.8 billion, as an autonomous division. There's a good reason for that approach: Some 60% of Business Objects' accounts have standardized on Oracle applications or databases. SAP insists that its lack of a relational database and OLAP cubes is its strength over the other three vendors, noting that some tools in its competitors' portfolios work only with their own databases. Yet as with the other vendors, that claim of autonomy for the Business Objects unit is only partly true because SAP sees a lot of potential for integrating Business Objects tools with SAP ERP. Much of its work going forward will be in operational BI, which would let customers perform analysis on data running through SAP ERP applications with little or no latency, perhaps even bypassing a warehouse altogether. Users can act on what they learn from that analysis by immediately making changes to workflows within those ERP apps. "Business Objects is the link," says John Schwarz, who was Business Objects' CEO and retains that title at the SAP division. "We're the solution that at all times has full possession of the facts about how well the business is performing and what processes could be improved." Operational BI is cutting-edge stuff, and SAP has yet to explain its long-term technology road map. It's been making strides with the technology, however. For example, its 2-year-old BI Accelerator is an Intel-based appliance that uses in-memory processing to speed up the query process in SAP's Business Warehouse data warehouse. Jim Kobielus, an analyst with Forrester Research, also expects SAP (and other BI vendors) to focus more on complex event processing, which lets users pull data directly from the source through a middleware fabric without having to move it to a data warehouse first. SAP says its BI strategy will emphasize collaboration, focusing on teams rather than individuals and making BI tools available in social networks and wikis. But that's more a vision than reality, since much of SAP's BI product portfolio is aimed at the top echelon of decision makers. That part of the business has been very good for SAP. SAP acquired compliance software company Virsa in 2006 and performance management software companies OutlookSoft and PilotSoft in 2007. These apps and others make up the new Performance Optimization Applications unit, under executive VP Doug Merritt. This is a fast-growing category of apps at SAP, Merritt says. SAP's biggest customer for those apps is the CFO and his lieutenants, who are struggling with tracking performance as well as dealing with regulations such as Sarbanes-Oxley. Another newly formed group, Business Intelligence Platform, is headed by executive VP and Business Objects alum Marge Breya. It includes all of the reporting, analysis, dashboards, and scorecards, plus SAP's data management software, which centrally cleanses, integrates, and manages data. Both Merritt and Breya report to Schwarz. Coca-Cola, which is standardized on SAP ERP, adopted SAP's Business Warehouse a few years ago as a repository for financial planning information. Performance was initially a problem but was improved with the BI Accelerator. "It was a bumpy road, but a really strong partnership from SAP," says Jeff Irwin, a global IT director at Coca-Cola. "They had people on site for weeks at a time working with us." SAP was able to improve performance on Coca-Cola's warehouse by 65%. Now Irwin sees great opportunity on the front end with OutlookSoft, Business Objects, and other tools and apps that SAP has acquired. SAP has some rationalizing to do with all the products it has acquired. Business Objects and SAP together have at least six products focused on planning, three on financial data consolidation, and a variety of scorecard and data visualization tools, says BPM Partners analyst John Colbert. Long-term support of such an array of overlapping products isn't realistic, Colbert says, and the company needs to make some hard decisions on what to move forward with. SAP has identified some apps it plans to phase out, including its Business Profitability Management app, SEM BSC scorecard, and BusinessObjects-PM performance management software. New development also will cease on several Business Objects planning applications. On the BI tools side, SAP's OLAP analysis tools, BEx Web Analyzer and Excel Analyzer, will merge with BusinessObjects Voyager OLAP analysis tool to create a new product code-named Pioneer. The company also will merge BusinessObjects Data Quality with its master data management offering to create a combined data and quality management offering. In places where there is continued overlap, analysts expect SAP to steer customers toward Business Objects as its premium BI tool suite and downplay its SAP NetWeaver BI suite. The Business Objects acquisition is a boon for SAP customers, Colbert says, since it will result in developers tying best-in-class BI tools more tightly with the company's ERP systems. But some Business Objects customers are likely to be unhappy with SAP's decision to phase out certain apps. In terms of integration, his advice to CIOs is to insist that SAP and Business Objects show how their products will match up to a business' unique requirements, "versus permitting them to dazzle you with canned product demonstrations and screen shots." If you're looking to make better use of transaction data, SAP might be the way to go. But the company is walking a fine line between pulling BI tighter to its core ERP applications and continuing to grow cross-platform sales on the Business Objects side. SAP is bound, in most cases, to give its ERP objectives priority. ORACLE'S WORK IN PROGRESS Oracle started a few steps ahead of SAP in marrying BI tools with enterprise apps, having bought Siebel Systems in 2005. Siebel Analytics has emerged as Oracle's flagship BI product, under the name Oracle Business Intelligence Enterprise Edition. The $3.3 billion acquisition of Hyperion last year strengthened Oracle's offerings in performance management software. And considering the large number of companies standardized on Oracle database and, to a lesser degree, Siebel applications, it's not surprising that InformationWeek's readers ranked Oracle as the top BI vendor in a survey last year. Oracle's pending $8.5 billion acquisition of BEA Systems will augment its BI strategy. Yes, BEA is a middleware vendor, but middleware is key to making it easier to get real-time BI out of transaction systems. Forrester's Kobielus predicts BEA will emerge as the cornerstone of Oracle's complex-event-processing technology. BEA appears to be in sync with the broad BI infrastructure strategy described by John Kopcke, Oracle's senior VP of enterprise performance management, in an e-mail interview. In addition to databases and middleware, Oracle has offerings in business activity monitoring, identity management, master data management, and content management, Kopcke says, some of which came from the dozens of acquisitions the company has made in the last few years. Oracle intends to support every application it acquires as long as there are customers for those products. It's a nice gesture, but one that could make it difficult to determine where to focus the company's BI developers. "They will have a pretty tough time rationalizing their resources with over 20 different BI products," says Forrester analyst Boris Evelson. Since Oracle's acquisition of Hyperion a year ago, the company hasn't provided much explanation of which products it expects to be strategic and which will just be maintained and supported. In fact, Oracle said its BI executives were too busy to talk with InformationWeek for this article, despite several weeks' lead time, and could provide Kopcke only via e-mail. Kopcke's description of Oracle's BI strategy includes other familiar themes, such as autonomy, ease of use, and integration. One of the biggest questions is how a company that does nearly one acquisition a month can reconcile all of that code base. Kopcke says that all of BI and performance management apps are centrally developed within the Oracle Fusion Middleware organization and "strictly adhere" to the company's "hot-pluggable" strategy of integrating with a variety of databases and enterprise applications. That description is overly simplistic, Evelson says, noting that Oracle is only part way through the integration of Hyperion products with its own. In the coming year, expect to see new Oracle products that give customers "the ability to understand the true profitability of products, customers, and services," Kopcke says. Oracle likely sees software that lets companies identify its most profitable customers as a strong sell in an economy where struggling retailers, banks, and other businesses are looking to squeeze as much as they can out of customers. It's unclear, though, whether he's talking about enhancements to existing products or whether Oracle is scouting for another acquisition. Oracle seems content to carry on as a multibranded software company that includes BI. But it may be forced to rethink that strategy now that IBM and SAP own the most successful pure-play BI vendors, and Microsoft is finally succeeding with its BI strategy, with the recent release of PerformancePoint Server 2007 and rapidly growing market share. Interestingly, most analysts credit Microsoft's success to its largely organic growth strategy, in stark contrast to Oracle's piecemeal approach through acquisitions. Oracle offers all the pieces of an enterprise-wide BI strategy, including a powerful database, data warehouse, data management software, middleware, and BI applications and tools. But if you're leaning in Oracle's direction, you'll want more information on the future of these products: Which ones does Oracle plan to enhance going forward and which ones will end up in the maintain-and-support category, and when will its two flagship products, Oracle Business Intelligence Enterprise Edition and Hyperion EPM, be fully integrated? Until these questions are answered, Oracle's BI strategy is incomplete. MICROSOFT EXTENDS BI'S REACH Microsoft, a BI leader. Who knew? Among the four megavendors, it's been the dark horse that may have a shot at winning. After years as a niche player in the BI market, the company finally started making headway last May when it held its first business intelligence conference, pulling in a respectable 2,600 attendees. It made further progress when it launched PerformancePoint Server 2007 in September, which ended Microsoft's previously scattered approach to BI. It pulled together Microsoft's products, including business Scorecard Manager, Excel, and new apps for planning, budgeting, and forecasting, with advanced visualization and analysis technologies acquired from ProClarity. In February, Gartner identified Microsoft as a leader in the BI platform category, saying it surpassed IBM's Cognos and SAP's Business Objects in its ability to execute in areas such as product investment, pricing, market responsiveness, and customer experience. Microsoft's BI revenue grew 28% to $480 million in 2006, faster than any other BI vendor, following 25% growth in 2005, according to IDC. Microsoft's goal is to tap into users' familiarity with its Office suite and bring different types of workers to BI. The "everyman's BI" vision is a lofty one and could make it even more difficult for Microsoft to win the respect of power users or gain traction with large businesses. One place Microsoft is weak is in its offerings of technologies that organize and manage data to provide better analytical capabilities. They don't stack up to the scale and functionality offered by some of its competitors. That could change: Last June, Microsoft acquired Stratature, a small vendor of master data management software, which creates a single place to update, maintain, and analyze hierarchies of data in specific categories, such as on customers and products. The bedrock of Microsoft's BI platform is the SQL Server database, though Microsoft BI tools can work with IBM's DB2, Oracle, and other databases, says Bill Baker, general manager of BI for the Office platform and a Microsoft distinguished engineer. Baker sees SQL Server 2008, scheduled for broad availability within a few months, as adding to Microsoft's BI momentum, with its improved performance and integration with Office. Microsoft also plans to offer improved capabilities for managing and monitoring large data warehouses, he says. Yet some BI industry pioneers, including MicroStrategy's CEO Saylor, don't consider Microsoft a serious contender. BI efforts are usually tied to Oracle and DB2, he says, not SQL Server, at least not among large companies. Microsoft's key BI product, the PerformancePoint suite, includes technology from its 2006 acquisition of ProClarity, which provided a component-based approach to building custom BI apps. Microsoft has tied PerformancePoint to Excel and to its SharePoint collaboration software, creating a platform for delivering BI to the masses. User-friendly graphics such as scorecards are going to be more appealing and beneficial to more people in a variety of jobs, Baker says, while conventional-and typically lengthy-BI reports are on their way out. "People are overdosed on reports," he says. "If you get a report every day in the mail, the first time you scan it. The next day, you set an automatic delete on it." Meanwhile, Microsoft realizes it must shore up its metadata management capabilities and is investing in that area, he says, without providing specifics. But is it wise for Microsoft to make Excel such an important part of its BI strategy? While widely used, Excel is often criticized for being kludgy. But in this case, Excel may not be the issue. "Excel has never been the problem. Consolidating data from Excel has been," says Randy Benz, CIO at Energizer, which has standardized on Microsoft's BI platform. Energizer is using a PerformancePoint module that consolidates data from various sources and lets users analyze it using Excel. Microsoft's strategy makes sense at Energizer, a battery maker that now has 1,300 employees using BI tools and wants to make them available to even more. Employees in sales, logistics, supply chain management, marketing, financial, and other areas use PerformancePoint to analyze retail accounts. Employees work with the scorecards that Energizer's retailers use to assess the company's delivery performance. You couldn't do that with the BI tools designed for budget analysts and senior managers, Benz says. Other vendors' BI tools are priced to meet the needs of specific users, and that pricing doesn't scale to hundreds of thousands of people, Benz says. "Over time, some of these BI capabilities will become as widespread almost as Excel already is," Benz says, "and we'd like to believe we can take it to anyone in the organization." Microsoft's approach could be a boon for companies looking to expand their use of BI tools. On the other hand, it could turn out to be a dumbing down of BI. It depends on whether you buy into the company's vision of BI as a collaborative desktop application rather than a specialist's tool, and if you believe SQL Server will eventually match the scale and performance of Oracle and DB2. Another concern is Microsoft's long history of developing primarily for its own platforms. But with the opportunity offered by the fast-growing BI industry, expect Microsoft to stay in for the long term. Write to Mary Hayes Weier at [email protected]. --- WHAT'S NEXT IBM Tighter links between Cognos and Lotus Notes for more collaborative BI. More capabilities for searching and analyzing unstructured data using IBM Labs' natural language processing technologies. SAP A road map of how operational BI will let ERP customers instantly analyze transactional data and change transactions based on that knowledge. ORACLE BEA Systems' middleware will link BI tools to transactional data. Also, new software capabilities-or maybe another acquisition-in profit management. MICROSOFT Release of SQL Server 2008, with better performance, more integration with Office, and improved ability to manage data warehouses will increase credibility as a BI platform provider. --- IBM STRENGTHS - Cognos is the standard BI tool at many companies - Strong database platform - Expertise in data management, data integration, and middleware WEAKNESSES - Information management focus requires thinking differently about buying and managing BI - Could lose ground in the race toward operational BI since it offers few business apps --- SAP STRENGTHS - Commitment to let Business Objects-the BI tools industry leader-operate autonomously - More and better BI capabilities for big SAP ERP users, including operational BI - Strong performance management offerings for CFO office WEAKNESSES - Faces challenges in keeping Business Objects autonomous while integrating it more tightly with SAP ERP - Other vendors will improve integration between BI tools and databases; SAP doesn't own a database --- ORACLE STRENGTHS - Strong offerings in BI plus related products, including enterprise apps, databases, data warehouses, middleware, and data integration tools - Leading vendor of performance management tools used by CFO offices - Centralized development in the Oracle Fusion middleware group will provide better integration between Oracle BI and performance management applications WEAKNESSES - Signs of disorganization, and the company hasn't presented a clear vision of its BI platform following the Hyperion acquisition last year - It needs to clarify the future development of some 20 different BI products that have come from various acquisitions --- MICROSOFT STRENGTHS - Lowest cost per user - PerformancePoint and SharePoint are a duo for company-wide, collaborative BI - SQL Server keeps improving in scalability and performance WEAKNESSES - Years of dabbling in BI have left the perception that Microsoft isn't a serious BI player - Limited BI experience within large companies (unless you consider Excel a BI tool) --- DIG DEEPER PERVASIVE BI If you're not using BI tools throughout your workforce, it's time to start-or get left behind in your competitors' dust. 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