Business Intelligence Software
Buyers of business intelligence software have to weigh the often conflicting needs of standardizing the source of their software to realize cost economies as against acquiring innovative software from ‘best-of-breed’ companies who often do not have the ability to provide a package of transaction data software, ETL and business intelligence tools. The quality of middleware has vastly improved in recent years with the advent of web services but companies still prefer a solution from a single vendor as we will discuss later. While business transaction database companies are increasingly incorporating business intelligence software, they are still not functionally as rich in business intelligence functions.
At this point of time, the industry is divided between vendors who excel in implementation of business intelligence software, as assessed by Gartner, and many of them are cash-rich companies from the mature segments of the enterprise software sector. On the other hand, the pure-play business intelligence software companies have stood out for their visions; they are emerging companies which are relatively weak in their capabilities to develop the infrastructure for business intelligence. None of the companies have both the capabilities for users to be able to make a clear choice of a vendor.
The players from the traditional segments of the enterprise software industry, i.e., Enterprise Resource Planning, RDMS, Customer Relationship Management and Supply Chain Management companies have added Business Intelligence functions in their offerings. They stress their proven track record and familiarity while the ‘pure-play’ BI companies berate this ability as commonplace in an environment where web services facilitate convenient integration with existing applications. According to estimates of Gartner, the users who decide to opt for ERP companies, who are also able to meet the application requirements of customers including BI, will incur costs that are 25% lower than those who decide on ‘best-of-breed’ or more specialized innovative companies by 2005. The best of breed companies are more innovative and find new ways to compete but the fact remains that the older companies are either buying them or are able to incorporate or embed their software within their package and lower costs of servers and license fees.
The merits of these contradictory claims can be judged from a recent survey of BI and DW professionals who are members of TDWI. The data from 552 BI and DW professionals indicates that 56% of them use BI solutions from their transaction database providers either exclusively or jointly with third-party solutions. On the other hand, 61% of them are using either third-party solutions exclusively or in combination with the transaction database providers. Users are more likely to prefer transaction database providers when they need to access information from their software and when the data is used for routine analytical functions like fraud detection and profiles of customers for contact management. Also, they are more likely to use software from transaction database providers when they also provide the ETL solution as well saving them the job of extracting the data. On the other hand, third-party solutions are likely to be preferred for advanced analytics like predictive analysis or ad hoc queries. Also, companies have a less compelling need to stay with their transaction database providers when they already have legacy software installed and need to use integration technologies. In all, companies are more likely to use transaction database providers as they increasingly use BI for improving operational management as is the case today.