Business Intelligence Corporate Performance Management Market Landscape

The BI/CPM Market Landscape

The vendor landscape remains diverse, with every vendor touting some or near total corporate performance management (CPM) capabilities. The abundance of astute vendors will prevent any single vendor from achieving leadership any time soon, while growth for all will be, in part, hampered by increasing pricing pressures. Thus, the "arms race" to marshal the most complete CPM platform has been intensified among major vendors, and many have a comprehensive set of business intelligence (BI) functionality, including online analytical processing (OLAP) analytics, ad hoc query, end user reporting, enterprise reporting, planning, and some type of analytic dashboards or balanced scorecards.

Part Five of the Business Intelligence Report Status Quo series. Parts One to Three were published June 27June 29

While 2003 saw a major onslaught of mergers and acquisitions (M&A) in the market involving large BI vendors like Cognos, Business Objects, SAS, Actuate, and Hyperion (see Has the BI Market Consolidation Been Crystal-Clearly Actuated?), 2004 and 2005 have also had their smaller share of M&A, with IBM acquiring AlphaBlox and Ascential, and Cognos acquiring Frango and Optima Analytic Solutions.

The pressure for these pure-play BI players also comes from large enterprise applications vendors like SAP, Microsoft, Oracle, or Siebel and their resources and business motivation to invest in their own BI solutions. This includes the underlying technology and the analytical applications, with their install base as the primary target.

This is Part Four of a seven-part note.

Part One detailed history and current status.

Part Two looked at contemporary BI tools.

Part Three described what is available.

Part Five will discuss Geac and Point Solutions vendors.

Part Six will compare direct access to a data warehouse for the mid-market.

Part Seven will make recommendations.

SAP Analytics

For example, SAP is changing the positioning of its business information warehouse, SAP BW, to become a part of SAP NetWeaver, a platform aimed at delivering infrastructural functionality like collaboration, portal, business process management (BPM), application integration, and BI across the entire enterprise applications landscape. (For more details, see SAP Bolsters NetWeaver's MDM Capabilities). It opted for this route instead of delivering a packaged standalone data warehouse (DW), as was initially marketed after its launch in 1998.

Building on the successes of SAP NetWeaver BI, and the Strategic Enterprise Management (SEM) suite, SAP, during its European SAPPHIRE '05 user conference, unveiled more than 100 industry-specific analytic applications built on the SAP NetWeaver platform. These applications should empower users with new ways to drive core processes and business decisions based on actionable business insight. Accordingly, SAP Analytics are a new breed of model-driven, composite applications across more than twenty-five industries. SAP Analytics aim at merging data from SAP and non-SAP applications with BI queries, to eliminate disparate islands of data. They will also combine transactional, analytic, and collaborative steps across multiple business functions, departments, and even organizational boundaries.

Unlike traditional after-the-fact reporting tools, SAP Analytics applications will aim at pulling all relevant information—whether historical or current—from across a wide variety of enterprise systems to deliver clear and broad business insight that should help users drive current processes and take the wisest possible steps. These will reportedly deliver data in the business context of the specific process—letting a business manager know, for example, not only the day's sales figures but also whether these figures are on target compared against past performance and the current year's revenue goals.

Reportedly, each SAP Analytics application will be designed to easily be combined and extended with other analytics applications, and will play a specific role across areas such as SCM, CRM, and product lifecycle management (PLM). Some examples include

• SAP Analytics for retail will help store managers better understand and predict the performance of core activities, such as trade-promotions, in order to make adjustments to processes and strategies while there is time to impact outcomes.
  
  
• SAP Analytics for credit management will allow financial service companies to display customers' credit information, buying behavior, past purchases, and credit lines in the historical context of data stored in SAP and non-SAP systems or syndicated data sources such as Dun & Bradstreet. From inside the same application, users can then increase or stop access to credit lines for a given customer or partner and even block or authorize individual purchases.
  
  
• SAP Analytics for tax management will complement the SAP for Public Sector solution. It will allow organizations to better monitor and understand the tax basis, where contributions are coming from in the context of historical tax collection, and take steps to reclaim amounts due using the same application.
  
  
• SAP Analytics for high-tech manufacturing will allow managers and other employees at production plants and warehouses to gain an insight into order status, plant utilization, order backlog and restock levels. Some SAP partners have consequently built SAP Analytics applications that unify manufacturing execution system (MES) data with order supply chain and production data from SAP systems in order to provide highly granular views down to individual machines' uptime status and throughput capacity.
  
  
• SAP Analytics for CRM will continue to complement the mySAP CRM solution by providing visualization across marketing, lead generation, pipeline visibility, sales effectiveness, and individual customer views. By unifying sales data with financial data, fulfillment data, and manufacturing inventory data, SAP Analytics for CRM will empower sales executives and corporate offices with a complete view of customer buying patterns and profitability allowing them to detect hidden opportunities for future business growth.

SAP touts that its model-driven, code-free, and services-enabled design environment, SAP Analytics, will allow business users and analysts to easily deploy, configure, and combine analytic applications to customize SAP Analytics to support evolving business requirements. Further, SAP Analytics leverage SAP NetWeaver Visual Composer, Macromedia Flex, and multiple platform capabilities including BI and enterprise portal, which should provide industry savvy system integrators (SI) with the applications and tools to support their clients' evolving business needs. Independent software vendors (ISV) and syndicated content providers will also likely benefit from these new applications and tools. They will be able to better help mutual customers, as both partners and ISVs will be able to build new analytic applications by becoming certified in the Powered by SAP NetWeaver program. SAP Analytics will be available toward the end of 2005 and sold as add-on products. One should note, however, that SAP currently has analytics that are sold with SAP BW, whereas SAP's new move mainly adds additional industry-specific analytics. In any case, both old and new capabilities still also require the implementation of SAP BW to get the analytics.

SAP Working With HP and Intel

In May, during SAPPHIRE '05 Boston, SAP's international customer conference, SAP announced the completion of a development project with HP and Intel. The project produced a low-cost, appliance-like offering designed to provide breakthroughs in both performance and flexibility for SAP NetWeaver BI. This offering combines the technologies of the three renowned companies to accelerate the performance of SAP's analytic applications that debuted at SAPPHIRE '05 Copenhagen and to enhance generic SAP NetWeaver queries. Developed in collaboration with Intel as an integral capability of the SAP NetWeaver platform, the "enterprise services-ready" technology is pre-loaded on highly flexible and scalable HP ProLiant servers running on 64-bit Intel Xeon processors and HP StorageWorks storage area network (SAN) systems. Intel is collaborating with SAP to drive development and to scale SAP Enterprise Services Architecture (ESA), including the development phase. Enhanced query performance is a key element on a technology road map that conforms to ESA, SAP's blueprint for a business-driven approach to service-oriented architecture (SOA).

The three vendors cite that in the past, companies could execute high-performance queries, but only by sacrificing query flexibility and thus worker productivity. Now companies should be able to gain instant access to valuable business information, such as inventory and profitability data to help them improve productivity, make more accurate sales forecasts, enhance supplier relationships, or increase the focus and effectiveness of marketing campaigns. The three industry leaders worked jointly to deliver this low-administration appliance, specifically designed to work with SAP NetWeaver BI installations, which might change the way BI is used within an organization.

Increasingly, today's companies are called upon to handle greater and greater stores of heterogeneous data, and in order to maintain efficiency and maximum customer satisfaction, companies must have the ability to query and access millions or even billions of records in minimal time. With the challenge of delivering response times in seconds and sub-seconds, it is difficult to balance good response times, acceptable maintenance effort, and process integration. The associated cost of delivering such high-end performance for BI has traditionally been tied to expensive hardware, considerable manual tuning efforts and stand-alone products disconnected from processes. Thus many companies may welcome the paradigm shift in boosting query performance, which is enabled by this new appliance offering, and is based on search functionality and in-memory processing, and is fully embedded into SAP NetWeaver.

SAP is taking advantage of HP's system and solution expertise to offer a high-performance analytics technology as a packaged offering that might easily integrate with customers' existing IT infrastructure. The technology is available to customers on 64-bit Intel Xeon processor-based HP ProLiant servers, including low-cost HP ProLiant BL20p blade servers, and the HP StorageWorks Enterprise Virtual Array 5000 (EVA5000) or HP StorageWorks Modular Smart Array 1000 (MSA1000) SAN storage systems. The HP ProLiant blade servers provide easily expandable computing power for growing analytical needs and the modular design of the HP StorageWorks EVA5000. The MSA1000 systems provide customers with highly available, high-performance SAN storage systems, with scalability to multi-terabytes. Shipment will start with the upcoming release of the SAP NetWeaver platform later in 2005. In addition to being the first and primary partner, HP also is the first customer using the technology internally to perform data analysis processes more intelligently, efficiently, and at a reduced cost.

Oracle

Also in March, Oracle announced the general availability of Oracle Business Intelligence 10g, a comprehensive, standalone product. Although customarily included with Oracle Application Server 10g Enterprise Edition, this first time offering is designed to address a spectrum of analytical requirements facing businesses including query, application development, reporting and analysis, data integration, and management. The release of this new unbundled product extends Oracle's opportunity in the BI market, and makes it easier for customers to purchase and deploy enterprise-level BI solutions, with a price tag of $20,000 (USD) per processor or $400 (USD) per named user. The vendor hopes to remove the costly and tedious process customers go through of piecing together point BI solutions by delivering a broad product. 10g comprises the following integrated components:

• Oracle Discoverer—query, reporting, and analysis with dashboard features;
  
  
• Oracle Spreadsheet Add-In—direct access to Oracle OLAP from within Microsoft Excel spreadsheets;
  
  
• Oracle Warehouse Builder—data quality and extract/transform/load (ETL) functionality; and
  
  
• Oracle BI Beans—custom BI application development.

Oracle's launch of standalone and customizable BI tools might best illustrate the trend of larger enterprise applications providers that are realizing the opportunity to directly serve the prosperous BI market. Market demand is forcing the need for sophisticated BI tools right into the organizational depths of even mid-sized companies. BI providers, who have, until recently, mainly targeted corporate strategists and statisticians, are now looking to the likes of vice president of operations as their future source of new opportunity.

The opportunity for Oracle is indisputable, at least based on the numerous users that already have an Oracle-based data infrastructure. Some well-established BI products like Oracle Daily Business Intelligence are designed to support day to day operational blocking and tackling. The products can run directly off transactional systems and do not require a data warehouse per se. This competitive differentiator is achieved by leveraging particular features of the Oracle database, which are not yet available from other database solutions.

Last but not least, while its overall business has been faltering lately, there may be some lighting in the tunnel for Siebel which appears to be coming from the CRM BI side. The vendor has designed Siebel Enterprise Analytics with enterprise information integration (EII) in mind, and in just two years, this product has grown from a few early adopters to one of the vendor's fastest-growing and possibly the largest product lines in 2004. These have all been significant steps and will make the use of these large enterprise vendors' BI solutions more pervasive, at least within their install bases.

All these large applications vendors have chosen this strategy because they

• Have the internal resources to build and maintain their own BI solution
  
  
• Can leverage their extensive product knowledge
  
  
• Feel they have a better understanding of their customers needs
  
  
• Have total control over the product development direction (enhancements, fixes, etc.)
  
  
• Find it more profitable (i.e., they control pricing and do not have to share license, support, and services revenues)
  
  
• Often tend to have a mind-set that products should "be invented here"

While for most of these vendors' customers this is probably a good choice for many of the reasons stated above, there are exceptions. There might be too high a price, because often, the vendor expects a premium over alternative options. Additionally, there may be a need to integrate other data sources into the BI solution (where the enterprise software vendor's solution might be weak in this area). For more information, see BI Approaches of Enterprise Software Vendors.

This concludes Part Four of a seven-part note.

Part One detailed history and current status.

Part Two looked at contemporary BI tools.

Part Three described what is available.

Part Five will discuss Geac and Point Solutions vendors.

Part Six will compare direct access to a data warehouse for the mid-market.

Part Seven will make recommendations.

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