Business Intelligence Market Will Grow 10 Percent in EMEA in 2007 According to Gartner

‘Mega vendors’ predicted to own more than one third of the global Business Intelligence market by 2010

STAMFORD, Conn., January 30, 2007 – Business Intelligence (BI) platform revenue will grow 10 percent in Europe, Middle East and Africa (EMEA) in 2007 to reach 1.5 billion Euros, according to Gartner, Inc. BI platform revenue will grow at an annual compound growth rate (CAGR) of 9.7 percent to reach 1.9 billion Euros in 2010. Gartner said that while increasing investments in BI present good opportunities for software vendors, the market will get tougher in 2007 with increased competition from the major software vendors such as Oracle, SAP and Microsoft. It predicted that BI revenue from these �mega vendors� will grow three times faster than revenues from the BI pure-play vendors in 2007.

�BI has become a strategic initiative and is now recognised by chief information officers (CIOs) and business leaders as instrumental in driving business effectiveness and innovation,� said Andreas Bitterer, research vice president at Gartner. �A preview of the results from Gartner�s annual survey of 1400 CIOs worldwide shows that BI is the No.1 technology priority in 2007 – for the second year running.�

However, Mr Bitterer also cautioned that while BI is recognised as a strategic priority at management level, BI is not well understood among company employees. He said an increased focus on training would be crucial in 2007.

Gartner analysts assessed the opportunities and challenges presented by BI at the Gartner BI Summit, which is being held in London from 30 January – 1 February.

According to a Gartner survey conducted at the BI summit in January 2006, large organisations who already invest in BI spend an average of 1.16 million Euros per year purchasing BI software. For many of these organisations there is now a significant shift towards bringing BI �to the masses�. This means making BI tools available to increasing numbers of employees as well as customers, business partners and suppliers.

Nigel Rayner, research vice president at Gartner said, �Companies that have invested heavily in Enterprise Resource Planning (ERP) are now realising they need to invest in BI to extract value from the massive amount of data they are storing as a result of ERP.�

Mr Rayner continued, �BI is transformational in improving business effectiveness at all levels. Once people know what factors impact business performance, they can change what they are doing. ERP helps you do things better, but BI helps you do better things.�

Mr Rayner cited the Norwegian logistics company Tollpost Globe, speaking at the BI Summit, as one example of this. Tollpost went from being the worst performing company in their sector to the most profitable one in the space of four years. It also increased their revenues by nearly 60 percent in five years.

Shift in the market

Gartner said that as companies put a more strategic focus on BI, they are also taking steps to reduce the number of vendors and tools deployed in their organisation.

In the past, each department bought their own BI solutions, resulting in an explosion of different tools across the business. Today they are looking to use the same systems across the business to ensure a standardised and rational way of analysing and measuring the same data, and to increase impact and operational efficiency.

Gartner warned BI vendors that price pressures, increased competition and consolidation spell tough times ahead. It predicts that BI revenue from the �mega vendors� will grow 20 percent in 2007 compared to 6 percent for the pure-play vendors. In 2006 the �mega vendors� had just over 20 percent of the global BI market and Gartner predicts this will increase to more than 30 percent by 2010.

�The big software companies are well positioned because they have embedded BI into their platforms and they are selling into a large installed base,� said Betsy Burton, vice president and distinguished analyst at Gartner. �They may not always represent the best solution, but they are easy to install for a company that already have their platform in place. As companies try to standardise, it is convenient and in many cases cheaper to keep the same vendor.�

Ms Burton continued, �We will also see an aggressive push from Microsoft this year, seriously entering the market with their launch of Microsoft Excel Services as part of Office 2007 and the associated Performancepoint Server applications that will use Excel. This will be particularly attractive for small and medium sized businesses as standard BI functionality applications suddenly become available at a reasonable price.�

Despite the increasing presence of the �mega vendors�, Gartner believes traditional pure-play vendors will continue to hold the majority of the market during the next few years. However, increasing competition means they need to communicate their value-added services more clearly and they need to commit more resources in terms of time, money and focus to cut through the noise created by the �mega vendors�. If not, Gartner said they face the risk of the competition moving into other markets, such as performance management, as mega vendors look to expand their offerings.

Gartner�s recommendations to enterprises

Gartner recommended that enterprises take advantage of the highly competitive environment to negotiate contracts and buy basic BI functionality at lower prices, but stressed that they need to prepare for changes in technology and products. More importantly, in order to use BI to drive business transformation Gartner advised organisations to take the following steps:

Change the way the information architecture and application portfolio are implemented and managed.

  1. Change the way BI is integrated into business processes.
  2. Increase focus on developing user skills and instilling a culture for the use and analysis of information as an integral part of achieving business objectives and transformation.
  3. Establish a BI Competence Center. A steering committee has been a proven approach in many successful companies.

Mr Bitterer concluded, �To make BI a truly strategic business initiative, it must be supported by a governance model and an appropriate organisational structure such as the competence centre. Buying technology will not be enough and education of users is crucial to success.�

About Gartner

Gartner, Inc. (NYSE: IT) delivers the technology-related insight necessary for its clients to make the right decisions, every day. Gartner serves 10,000 organizations, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company consists of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,700 associates, including 1,200 research analysts and consultants in 75 countries worldwide. For more information, visit