Saturday, March 17, 2007

On Market and Product Consolidation

It should be pretty old news by now concerning the acquisition of Hyperion by Oracle and Hyperion's acquisition of Brio a few years earlier. While the cited article reports Business Objects position on the recent deal as "(creating) a bit more confusion in the marketplace", it is such market and product consolidation which works best for consumers looking for a complete business intelligence product, designed to support a performance management initiative.

Consider Microsoft Office Business Scorecard Manager 2005, for example. BSM 2005 currently supports monitoring, and analysis tasks through scorecard and report views displayed to users through SharePoint. However, to complete the remaining tasks in a typical performance management cycle, further off-line work would be required with additional tools like Microsoft Office Excel 2003 (or later) to assist with planning / budgeting tasks. Subsequent forecasting could be supported, with more work using SQL Server 2005 Analysis Services data mining models. Some have actually extended BSM 2005's data visualization capability by integrating with ProClariy Analytics helping users to better understand what's happening behind a given performance measurement or KPI.

The Microsoft example notwithstanding, the net effect of having multiple BI applications involved for a specific need becomes risky and problematic due to issues such as:

• potentially incompatibility among certain BI applications, from different vendors
• duplication of effort among BI applications
• increased licensing costs for separate BI applications

In SQL Server 2005 such problems don't exist, since integration, analysis, and reporting functions are consolidated into the single product. Consolidation is a great thing from a consumer perspective, since it solves the BI application issues (above) and provides increased value-for-dollar for the product itself. Moreover, the growing movement towards performance management demands an application that addresses each of the discipline’s tasks or phases.

The very idea that such aggressive consolidation in the increasingly competitive BI software marketplace is occurring simply means that we as consumers will benefit from a push for better features, bundled into a single offer (regardless of the vendor), and ultimately lowering the total cost of ownership on our part. Most vendors now realize that the way to deliver performance management effectively is through an investment in a BI system. Microsoft reported in their announcement of PerformancePoint Server last June that they have been listening to customer issues and responded with a bundled approach of their own, rolling together monitoring and analysis with planning, budgeting and forecasting functions in a single product.

While some may speculate whether the Oracle play is a "me-too" tactic or a defensive posture to retain existing Oracle customers, the bottom line that change is happening-- and change is definitely good for us with performance management needs.

What do you think? Is the current state of the BI software market a good thing for consumers? Or, is it all becoming too confusing?

- Adrian Downes

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