Mergers, Acquisitions, and Consolidations: How the BI Market Will Be Affected

Over the last several years, the BI landscape has changed dramatically.  A market that was once made up of a dozen or so key vendors, each with a different strength, has now become an industry of just a few heavy-hitters and a series of smaller, niche players. 

 

What happened?  First, the larger vendors began taking over the smaller ones.  Business Objects and Cartesis merged, as did Cognos and CPM specialist Applix.  Hyperion purchased both Brio and Arbor Software.  Teradata and SAS, two of the remaining providers, formed a tight alliance, which analysts expect to result in a full merger in the very near future. 

 

Then, the business management application vendors realized that BI was no longer a nice “add-on”, it was a critical component of any corporate technology architecture.  And, without fully-integrated BI functionality, their solutions would offer only limited value. 

 

But, instead of building their own reporting and analysis tools in-house, they sought out existing solutions with a proven track record of success.  Oracle purchased Hyperion.  SAP, a company that previously avoided large acquisitions and prided itself on its organic growth, took over Business Objects.  And, IBM swallowed up industry leader Cognos. 

 

So, what does all this activity mean for the BI marketplace? 

 

Some experts predict numerous issues over the next several years.  For example, in an effort to deliver value to as many companies as possible, the BI vendors had structured their solutions to integrate with most of the popular and widely-used business systems.  In fact, most BI vendors had formed strong partnerships with the leading application providers. 

 

But now, we are likely to see a conflict of interest which will pose huge problems when it comes to architecture.  What happens if an Oracle customer wants to use Cognos for performance management, or an IBM shop chooses Business Objects for operational reporting?  Will the solutions still be able to work together as well as they used to?  Or will these companies simply package their BI functionality with their current offerings, leaving buyers with limited choices when it comes to reporting tools?

 

Many industry pundits also wonder – with the SAPs and IBMs of the world running out of acquisition options – how they will they keep their BI portfolios current.  It is expected that, with so many other lines of business to focus on, the enhancement of BI offerings will fall low on the priority scale for these companies.    

 

That’s where the smaller niche players will come in.  Many wonder how these companies will survive amidst this new environment.  But the truth is, those that still exist after the mergers and acquisitions are over have a tremendous opportunity to emerge as the innovators.  It is these companies that will have the drive and the focus to lay the ground work for changing the way BI functionality is delivered and used.   They will shape the future of BI, continuously expanding and enhancing their solutions with the latest cutting-edge features and functionality.  And, as companies realize that BI is simply too important to just maintain the “status quo”, this is what experts believe will enable the smaller firms to remain competitive, give the “big guns” a run for their money, and save themselves from extinction.