The majority of large organizations have either already shifted away from using BI as just another back-office process and toward competing on BI-enabled information or are in the process of doing so. Businesses can no longer compete just on the cost, margins, or quality of their products and services in an increasingly commoditized global economy. Two kinds of companies will ultimately be more successful, prosperous, and profitable:
- More and deeper insights will generate competitive advantage. Companies with richer, more accurate information about their customers and products than their competitors will gain substantial competitive advantage.
- Faster access to insights will make companies more agile. Companies that have the same quality of information as their competitors but get it sooner and can turn it into action faster will outpace their peers.
Confirming the trend, Forrester's Business Technographics® Global Data And Analytics Survey, 2014 showed that top business performers (those with 15%-plus year-over-year revenue growth) planned to invest 38% more of their technology budget in BI in 2014 than their slower-growing peers and competitors.
The software industry recognized this trend decades ago, and, as a result, the BI market is swarming with new startups that appear and (very often) find success faster than large vendors can acquire them. The market is still jam-packed and fragmented with more than a hundred BI vendors — a trend supported by a steady 19% increase in the adoption of "other" BI software vendors from 21% in 2012 to 24% in 2014. Forrester attributes the trend to both the increased number of opportunistic BI startups taking advantage of the market fragmentation and their innovative architectures (cloud, in-memory, new types of user interfaces) that continue to challenge the incumbents. At one point in time or another, BI pros will encounter and have to deal with multiple vendor-specific market dynamics such as:
- Most ERP, CRM, and other business applications vendors offer strong BI platforms . . .
- . . . but there's also plenty of room for independent BI vendors.
- Departmental desktop BI tools aimed at business users are scaling up.
- Enterprise BI platform vendors are going after self-service use cases.
BI pros also need to consider other more recent market dynamics that are influencing BI vendor strategies and positioning, such as:
- Cloud services offer options to firms that prefer not to deal with BI stack complexity.
- Hadoop is breathing new life into BI functionality.
- Open source BI finds a new life inside "mother ships."
- The line between BI software and services is blurring.
Categorizing, evaluating, and ranking these 100-plus BI software vendors is a daunting task. Selecting a BI platform purely on better reporting, querying, OLAP, dashboarding, and data visualization (core components of most BI platforms) will lead to just a few critical variances, often not enough to highlight major differentiating factors between vendor A and vendor B. Therefore, Forrester recommends a rather detailed approach, such as the one we used in this evaluation, where we decomposed vendor offerings into hundreds of detailed features organized by four categories:
- Architecture. The first evaluation category concentrates on the architecture of the product and evaluates data access, data integration, information delivery, and technical and metadata architecture.
- Application development capabilities. The second evaluation category weighs the application development capabilities of the product and evaluates such features as integrated development environments (IDE), software development kits (SDKs), and APIs.
- Functional capabilities. The third evaluation category focuses on the functional capabilities of the product and evaluates such features as analytics, collaboration, data visualization, knowledge management, master data management (MDM), performance management, reporting, and self-service.
- Operational capabilities. The fourth evaluation category looks at the operational capabilities of the product and evaluates such features as administration and security.
The detailed list of BI platform capabilities and features is much, much longer. As part of the research conducted for this Forrester Wave, Forrester collected more than 750 data points from each vendor and consolidated them into 60 criteria.