Magic Quadrant for Business Intelligence Platforms

 

Market Overview

Gartner's view is that the market for BI platforms will remain one of the fastest growing software markets, despite sluggish economic growth in some regions. Organizations continue to turn to BI as a vital tool for smarter, more agile and efficient business. According to Gartner's annual survey of CIO technology priorities, BI and analytics has once again been named the top priority for 2012, a position it has held in three of the last five years. That said, however, slow economic growth, increasingly viable low-cost alternatives and consolidation are expected to keep BI platform growth in the single-digit range in 2012 and beyond. The BI platform market's compound annual growth rate (CAGR) through 2015 is expected to be 8.1% (see "Forecast: Enterprise Software Markets, Worldwide, 2010-2015, 4Q11 Update").

In 2011, the BI platform market expansion was influenced by significant increases in demand from a wide array of "users": line workers, business analysts, advanced analytic professionals, business executives, customers/constituents, partners, regulators, and IT professionals. Each user type, along with their associated use cases, brought lots of variety to BI, well beyond the core query, reporting, and analysis capabilities BI platforms have long been known for. Not surprisingly, those demands often conflicted; IT leaders collaborated with business leaders to prioritize efforts based on availability of budget, people, skills, technology and (hopefully) strategic alignment. With purchases rapidly expanding in lines of business, vendors are challenged to serve multiple masters. This expansion is not a temporary aberration, but a sea change for the business analytics marketplace, and by extension for the BI platform market.

Gartner has identified the following six trends that directly impact the direction of the BI platforms market.

The Rise of Mobile Computing Changes the Face of BI

The expansion of mobile computing devices — tablets and smartphones — has revived mobile BI by solving most of the problems that prevented success in the past. Gartner predicts that, by 2013, 33% of BI functionality will be consumed via handheld devices (see "Predicts 2011: New Relationships Will Change BI and Analytics"). That's one reason why we included it as a fourteenth platform capability in this year's BI platform definition.

The survey data bears out this rapid acceleration. More than 20% of survey respondents report that they are already using mobile BI or are piloting it. A whopping 33% plan to deploy mobile BI in 2012. By the end of 2012, a majority of organizations should have some mobility solutions in place, catapulting it to the same usage level as Microsoft integration and above predictive analytics. Use cases on deck are heavily skewed toward executive and management support using mobile devices. But there are signs that mobile BI is making inroads into other user communities — specifically field and knowledge workers — as it becomes a common mode of consumption for many. But it's quickly moving beyond consumption to a primary interaction model as well. Advanced mobile capabilities such as location awareness, write-back and native gesture support will strongly influence the types of applications developed, and buyers will demand mobile interfaces to core BI functionality sooner rather than later.

There are many mobile BI solutions in the market today. Most are extensions of existing BI platforms, others independent vendors making a name for themselves as mobile BI experts. See "Who's Who in Mobile BI" for a detailed discussion of mobile BI providers.

Where Is Innovation Coming From in Today's BI Platform Market?

When reviewing the 2012 BI platforms Magic Quadrant, you will notice that there are no "Visionaries" and few "Challengers." Why is that? The enterprise BI platforms market is a mature market, but it is also a constantly expanding one, with innovation coming from many quarters.

Looking back to the last big wave of market consolidation in the latter half of the past decade, large brands acquired best-of-breed products (Oracle acquired Siebel and Hyperion, SAP bought Business Objects, IBM purchased Cognos) and incorporated assets into their existing portfolios. This trend certainly continues. Large vendors continually acquired and subsumed innovative product into their portfolios. In 2011, for example, Oracle acquired Endeca, and IBM purchased Algorithmics to expand capabilities and address more use cases/industry requirements. These aren't small tuck-in acquisitions, but strategic purchases that expand market opportunity.

Smaller specialty vendors also innovate in specific functional areas or industries. They target a set of functions, such as predictive analytics, advanced visualization, geospatial analysis or cloud analytic platforms; they go deep into the healthcare of consumer packaged goods to deliver a spot-on solution to a targeted set of users. Large vendors also have the financial heft and technical breadth to fund research and development activities that innovate and broaden the appeal of their portfolios. They combine hands-on experience with thousands of customers to develop mobile applications, expand in-memory platforms, and develop function-specific engineered systems. This innovation dynamic impacts the "shape" of the Magic Quadrant participants in 2012. We expect it to continue to influence the market for BI platforms for years to come.

 

Microsoft

Strengths

• Microsoft offers a competitive set of BI capabilities, packaging and pricing that appeal to Microsoft developers and its independent distributor channel. The company has consistently invested in building and enhancing BI capabilities into three of its core offerings — Microsoft Office (specifically Excel), Microsoft SQL Server and Microsoft SharePoint — in order to increase their value and drive upgrades. By incorporating BI capabilities into its most ubiquitous products, Microsoft virtually guarantees its BI offering's continued adoption, particularly in organizations with a Microsoft-centric information infrastructure. As a result of this strategy, since the company's serious entry into the market in 2000, Microsoft's BI market share has grown steadily to take the No. 3 spot in 2010.
• Microsoft's low-license-cost bundling strategy for BI platforms makes it a compelling license-cost value proposition for organizations that want to deploy BI to a wider range of users, or that want to lower overall BI portfolio license costs by using lower-cost BI tools for basic BI functions. Its license cost profile is comparable to open-source BI vendors, and is considerably less than its commercial competitors. Moreover, Microsoft has added a new BI package (server/client access license [CAL] model) for SQL Server 2012, which makes it easier for customers to license the SQL Server BI portion of the stack. As Microsoft continues to enhance its BI capabilities in products that most companies already own (Office, SQL Server and SharePoint), the functionality premium for alternatives may become increasingly difficult to justify for many organizations. In the Magic Quadrant customer survey, more Microsoft customers cited TCO and license cost as the No. 1 reason for selecting Microsoft as a BI vendor than for most other vendors in the survey.
• Microsoft's market success is also driven in part by its IT-oriented, BI authoring tools within SQL Server, which are based on Visual Studio, the broadly adopted development environment. This approach, along with targeted marketing efforts and programs for building strong developer communities and support, has helped Microsoft lower the cost and expand the availability of its BI skills. In the Magic Quadrant survey, Microsoft customers rate its BI platform infrastructure among the highest compared to most other vendors, and a higher percentage of customers use it extensively. Moreover, "wide availability of skills" is among the top reasons why customers select Microsoft more often than all other competing vendors in the survey.
• While Microsoft has traditionally focused on the developer, it continues to enhance reporting, dashboarding and data discovery capabilities in Excel with the intention of making Excel not only the most widely deployed BI tool, but also the most functional for business users. With its April 2010 release of SQL Server PowerPivot and the upcoming release of Power View in SQL Server 2012, Microsoft has earned the distinction of being the first megavendor to offer a credible response to the groundswell of interest in, and acceptance of, interactive visualization tools as an alternative and complement to traditional report-centric architectures. Compared to what is available with competing stand-alone data discovery products, the user and usage monitoring capabilities of PowerPivot workbooks in SharePoint give IT greater control over what content is shared, and the process of validating data sources, models and calculations contained in PowerPivot workbooks. With the SQL Server 2012 release Microsoft is expected to build on this set of managed business user capabilities by enabling PowerPivot to move seamlessly from a personal workbook to an enterprise data source and deployment. Specifically, IT will be able to import user-created content from a personal PowerPivot model into the professional BI environment of Visual Studio. This capability can help to bridge the departmental silo/enterprise divide, without compromising on business-user flexibility.
• Use of OLAP functionality by Microsoft customers is among the highest when compared to other vendors. This can be attributed to the success and adoption of Microsoft SQL Server Analysis Services functionality bundled with Microsoft SQL Server and its optimizations with Microsoft front-end tools. Building on the in-memory capabilities of SQL Server PowerPivot, in SQL Server 2012, Microsoft will introduce a fully in-memory version of Microsoft Analysis Services cubes that enables the subsecond analysis of billions of rows (as opposed to hundreds of millions of rows supported today by PowerPivot), to address the needs of organizations that are turning to newer in-memory OLAP architectures over traditional multidimensional OLAP architectures to support dynamic and interactive analysis of large datasets.
• Microsoft's cloud-based DataMarket offering, which makes external data easier to consume, analyze and integrate with internal data, is a unique enhancement to Microsoft's portfolio of BI capabilities. DataMarket is an online data market that enables ISVs and business users to access, purchase and analyze trusted, public-domain and commercial premium data. ISVs can use this data to build new analytic applications. Business users can incorporate and analyze this external data with internal data sources using Microsoft Excel and PowerPivot, or with partner tools, such as those from Tableau Software.

Cautions

• Since Gartner began surveying BI platform customers for this Magic Quadrant research five years ago, this is the first year that Microsoft has scored below the survey average on key Ability to Execute measures, including overall product functionality, support and customer experience. These results are reflected in Microsoft's lower relative Ability to Execute position on the Magic Quadrant compared to last year.
• Multiproduct complexity is a challenge. Because Microsoft's BI platform capabilities exist across three different tools (Office, SQL Server and SharePoint) that also perform non-BI functions, integrating the necessary components and building the applications is left to the organization. Microsoft's do-it-yourself approach puts more of the BI solutions development and integration onus for the platform components on customers, compared with the all-in-one purpose-built BI platforms offered by most other vendors in the BI market. Microsoft's road map for Office, which features the consolidation of more and more front-end reporting, dashboard and analysis capabilities in Excel, should begin to address some of this complexity over time. Moreover, although BI in the cloud is not yet a high priority for most organizations in the Magic Quadrant survey, Microsoft has placed cloud deployment at the top of its list of major development and go-to-market initiatives for BI by ultimately making its core BI products — SQL Server, SharePoint and Office — available in the cloud. This investment and emphasis is core to Microsoft's strategy to make BI easy to deploy and low-cost — cloud-based BI will, in theory, remove some of the complexity of the three-component requirement.
• Microsoft lags behind most other BI vendors in delivering mobile BI capabilities. It has, instead, relied on partners, such as Decision Support Panel, Roambi and Extended Results, to build mobile solutions for Apple iOS that integrate with Microsoft BI components. Microsoft BI assets can run in a browser today, but they are not optimized for iOS, Android or Windows devices. Microsoft has stated that it plans to optimize browser experiences on mobile devices in the future, including the version of Safari provided by the iPad. It is notable that despite limitations to Microsoft's current mobile BI capability, an above average percentage of Microsoft BI customers report that they plan to deploy a mobile BI solution in the next 12 months.
• Microsoft discontinued the development of Microsoft Office PerformancePoint Server 2007 (PPS 2007) as a stand-alone solution for financial analytic applications (for example, planning, budgeting and consolidation) in favor of moving its CPM capabilities, such as financial reporting, into the Dynamics applications. Microsoft moved the functionality in PPS 2007 for dashboards, scorecards and analysis natively into SharePoint as SharePoint 2010 PerformancePoint Services. As a result, Microsoft's performance management product strategy lags behind that of the other stack vendors (IBM, Oracle and SAP) that offer stand-alone CPM products. Microsoft instead relies on its partners to deliver Microsoft-based CPM solutions.
• There is currently no single business metadata layer or capability that spans Microsoft's BI platform components, and there are limited capabilities for sophisticated metadata modeling, impact analysis, data lineage and change management. In Gartner's BI platform customer surveys, Microsoft scores below average year after year for its metadata capabilities. This year is no different; Microsoft earned among the lowest semantic layer integration and metadata functional rating scores of any vendor. The lack of a unified semantic model has been a key customer pain point and limitation. In response, Microsoft will be shipping the BI semantic model as the single business metadata layer, in the SQL Server 2012 release for relational and multidimensional data, and is adding data lineage, impact analysis and master data services in SQL Server 2012. As customers upgrade, we would expect these results to improve in next year's Magic Quadrant survey.
• Microsoft's recent announcement to support Hadoop on Windows is a signal that it has plans to support diverse data types. However, unlike Oracle and IBM, beyond Hadoop, even though Microsoft has Bing, its core search engine, and FAST, its enterprise search engine in SharePoint 2010, Microsoft has not articulated a comprehensive vision around delivering analytics for diverse data. At the time of the FAST acquisition, however, FAST was gaining some traction with its BI search capabilities.

Oracle

Strengths

• In 2011, Oracle Business Intelligence Foundation Suite, with its principal component Oracle Business Intelligence Enterprise Edition (OBIEE), continued to execute on its stated top-to-bottom BI vision. This year, the products have the highest aggregate Ability to Execute scores. References depict a customer base that is Oracle through and through — 85% run Oracle Database as their data warehouse, nearly 75% run Oracle Applications, and a majority utilizes Oracle Fusion Middleware. Oracle is deployed most broadly (in respect of global deployment) of any vendor in this Magic Quadrant, with average user populations nearing 3,000 and data volumes of more than 5 TB, and it is considered the BI standard for nearly 70% of firms surveyed. While complex workloads are below average, the breadth of use scores in the highest quartile.
• During the Magic Quadrant evaluation process, Oracle announced and completed its acquisition of Endeca, a search-based provider of e-commerce and analytic capabilities. Customer surveys were conducted before the Endeca acquisition was completed; therefore, Endeca is not factored into the Magic Quadrant evaluation of Oracle's execution, but was considered as part of its long-term product vision. Relatively low numbers of existing references access hybrid data types using OBIEE. Gartner believes that this is a forward-looking acquisition that will have significant impact on the company's business analytics future (see "Endeca Buy Extends Oracle's Ability to Support and Discover Diverse Data" for a more detailed opinion of the acquisition).
• In October 2011, the company announced an engineered system — Oracle Exalytics In-Memory Machine — that leveraged assets across the Oracle stack. The integrated hardware/software analytics solution features a package of OBIEE with new in-memory capabilities (based on Oracle's acquisition of TimesTen), optimized Oracle Essbase to support the range of traditional BI (reporting, dashboards and analysis), and dynamic planning, what-if and scenario analysis, as well as interactive visualization and data discovery capabilities. The system is designed to support high-performance BI and performance management use cases with the intention of improving the performance, scale and speed of reporting, analysis and planning applications. It is now generally available.
• References select Oracle primarily for functionality, enterprise application integration, and data access capabilities. Additionally, customers indicated that they valued the products' ability to support large numbers of users. Like other megavendors, the product road map plays an important role in the evaluation process. Ease of use and cost do not factor significantly into the selection process.
• Oracle Business Intelligence Applications (OBIA) are predefined analytic applications for horizontal business processes such as finance, procurement and sales analysis. Customers and prospects find this combination of analytic applications built using the OBIEE toolset appealing, with many buyers selecting both at evaluation time. Additionally, the company also delivers vertical-specific analytic data models for industries such as retail and financial services for IT buyers looking to establish a common data model standard as the foundation for analytics.

Cautions

• References rate OBIEE as difficult to implement, with only SAS Institute considered more difficult. Also, the product was rated as having lower than average ease of use scores. As ease of use for both developers and end users takes on an even more important role in business analytic deployments and evaluations, Oracle must explicitly address these issues or risk being marginalized in user-driven projects. The company has been slow to respond to the data discovery trend. However, some functions are now available in the Exalytics In-Memory Machine, and the Endeca acquisition will add more capabilities in this important area.
• Product functionality evaluation scores remain below average again this year, a trend that appeared in last year's report. Additionally, customer support and product quality issues are rated below the average (in the fourth and third quartiles respectively) for all vendors in this report. In fact, both support and product quality were also noted as issues that blocked further deployments within customer organizations. This represents a slip from last year's scores. While not huge red flag items now, they may become more problematic without dedicated company attention to address client concerns.
• Oracle customers use the product mostly for static report viewing, parameterized reporting and scorecard capabilities, leading to below average user complexity ratings. Slightly more than 25% of customers Gartner surveyed for this report run the most current version of the BI suite, which is significantly below average for vendors in this analysis.
• More than 10% of survey respondents indicate that they plan to discontinue, or are evaluating a discontinuation of, software use in the next three years — a relatively high response rate given responses from the prior year. This is above the average for all vendors in this research.

 

SAP

Strengths

• The combination of SAP BusinessObjects and SAP NetWeaver BW revenue accounts for the largest share of the BI platform market, with both SAP platforms continuing to support large enterprise deployments (more than twice the average for both data size and number of users). Similarly, a higher percentage of SAP customers than for most other vendors in the Magic Quadrant survey cite "corporate standards" and "integration with enterprise applications" as among the top reasons why they chose SAP for BI.
• SAP has one of the largest global direct sales, support, and channel and services ecosystems. Moreover, the combination of SAP and BusinessObjects constitutes the largest installed base in the BI platforms market, which represents a significant and captive cross-sell and upsell market opportunity for SAP. SAP's product investments and road map are targeted at both the independent market and the SAP-centered market. Those product efforts that targeted the SAP base (particularly for SAP BusinessObjects BI 4.0 and HANA), when coupled with aggressive bundling and pricing, have resulted in strong product sales. Last year, 36% of SAP BusinessObjects customers in the survey reported having SAP as their primary ERP platform. In this year's survey, that percentage has increased to 42%.
• SAP has a compelling and comprehensive product vision that addresses many key future trends including mobile, collaborative analytics, and analytics on big data. SAP complements its BI platform with forward-looking capabilities in the areas of collaboration and decision support (with its StreamWork product), text analysis integrated with its enterprise information management products, and search-based data exploration with its SAP BusinessObjects Explorer product. SAP's product vision for its in-memory computing platform, HANA, promises to solve many of the perennial performance issues of large complex BI deployments in general (given its SQL and MDX access for third-party tools) and SAP BW in particular (HANA for SAP BW is in ramp-up status as of November 2011). SAP was one of the first of the leading BI vendors to introduce a SaaS offering, BusinessObjects BI OnDemand. The company has also made investments in mobile BI, leveraging assets from its Sybase acquisition into capabilities in SAP BusinessObjects BI 4.0 that deliver SAP BusinessObjects Explorer and SAP BusinessObjects Web Intelligence as a mobile application on multiple device platforms. However, there are many pieces to this vision. Clarity around the road map, demonstration of the value proposition, and execution will be critical to customer uptake and overall satisfaction with SAP.
• SAP is investing in industry- and domain-specific packaged applications built with SAP BusinessObjects that include a data model, ETL and business content. Although uptake of these applications is in the early stages, SAP has moved to optimize a number of these packaged applications for SAP HANA, and plans to port more of these applications to HANA throughout 2012. This could enhance the value proposition of the HANA platform beyond its capabilities for performance acceleration.

Cautions

• Customer inquiries with Gartner analysts about SAP BusinessObjects continue to express confusion about the BusinessObjects, SAP BW and HANA road maps, given the product changes to support optimizations with the SAP business applications and NetWeaver BW products, and the perceived unknown costs of migrating to the new road map. These customers have also told us that the migration, implementation and integration choices can be confusing. These sentiments are supported by survey responses to the "view of vendor's future" question, which indicates that twice as many of the SAP respondents (compared with the survey average) indicated that they are "more concerned" about the vendor's future. Many SAP NetWeaver BW customers and SAP BusinessObjects customers are still determining what role these products will play in their future architecture and BI strategy. This uncertainty may also be contributing to the sentiment that SAP is among the top three vendors whose software customers are thinking about discontinuing, a percentage that is almost three times the survey average.
• This is the fifth year in a row that our market survey data shows ratings for SAP's customer experience (which includes ratings for support and software quality and for sales experience) as the lowest of any vendor in the survey. That said, SAP is building on last year's customer success initiatives, by stepping up its efforts to work with Americas' SAP Users' Group for customer input, and it has increased investments in programs to redesign the SAP support process to address customer issues, and to address the customer experience more broadly.
• While SAP's customers tend to have very large and global deployments, poor performance is mentioned twice as frequently as the survey average as a problem limiting broader deployment, while direct performance scores are among the lowest in the survey. This problem is more acute for SAP BW customers than for SAP BusinessObjects, but both products score near the bottom of the survey on this measure. Both SAP and SAP customers alike are hoping that SAP HANA can address this problem. Early adopters of HANA SP1 and SP2 (HANA on SAP BW) have reported positive experiences in this regard.
• Both SAP BusinessObjects and SAP BW scored below average, when compared to other vendors in the survey, across all 14 BI platform capabilities evaluated during the Magic Quadrant research process. Of those capabilities, SAP BusinessObjects' customers identified reporting and ad hoc query functionality as the platform's top strength. SAP BI 4.0, made generally available at the time of this year's Magic Quadrant survey data collection and therefore not included in the survey responses, is expected to provide a significant number of feature and usability enhancements, in addition to improved integration with SAP BW. As more SAP BusinessObjects customers upgrade to this latest version, we would expect to see better product scores reported in next year's Magic Quadrant.
• At the end of August 2011, SAP implemented its third license model change (Concurrent Session-Based Licenses [CSBLs] and Named User licenses) for SAP BusinessObjects since the Business Objects acquisition in January 2008. While there are many advantages for users in using CSBL, changing license models have contributed to confusion, and concern. Also, some customers are charged for upgrades when they expected to be provided with product at no/low cost — for example, SAP BEx Analyzer customers expecting to move to SAP BusinessObjects Analysis for Microsoft Office.