Business Intelligence Market Consolidation — What To Expect Next
The past two years have seen a significant divergence in the maturity of the supply and demand sides of the business intelligence (BI) market. This divergence will influence market dynamics for the next two years and affect enterprise insights leaders making strategic vendor and platform decisions. Specifically, the:
- Supply side is very mature. BI technology has been around for at least 30 years, and it continues to grow and thrive. In 2019, Forrester projects it to be a $22 billion market growing at 9.3% year over year, with no end in sight: 62% of global data and analytics decision makers have implemented, are implementing, or are upgrading/expanding implementation of BI, while another 23% are planning to implement in the next 12 months. But, as inevitably happens with such mature and long-living technology, most features, such as database connectivity and data ingestion, security, data visualization, and slice-and-dice OLAP capabilities, have become table stakes.* As a result, Forrester no longer evaluates all features of BI platforms but only what we consider differentiated capabilities. Increased technology maturity and decreasing differentiation between BI platforms are driving the latest round of M&A in this market.
- Demand side is still quite immature. The demand side — organizations procuring and deploying BI solutions — is in stark contrast with the supply side. Fifty-six percent of global data and analytics decision makers (seniority level of manager or above) say their firms are currently in the beginner stage of their insights-driven transformation. Further anecdotal evidence shows that enterprises use no more than 20% of their data for insights, and less than 20% of knowledge workers use enterprise BI applications, still preferring spreadsheets and other shadow IT approaches. Why? BI technology only addresses part of the success equation; the other components, such as people, process, and data, remain quite challenging to master. The low maturity of the people/process/data components will ensure that the BI technology market is healthy and vibrant for the foreseeable future. It’s easier to switch to another BI tool rather than fix inherent problems with data management, quality, and governance.
Forrester has points of view on a number of related questions, including:
- What’s driving the latest wave of vendor acquisitions?
- What should organizations consider as they make BI portfolio decisions?
- What can organizations do to protect their BI portfolios from M&A risk?
For more information on the above topics and others, please see our latest research, “FAQ: How To Survive The Ongoing BI Vendor Market Consolidation.”
* OLAP: online analytical processing