The business intelligence (BI), analytics application and performance management software sector continue to experience substantial growth in revenue hitting US$12.2 billion last year, as it remains the top IT priority, and takes the lion share of spending outside IT, a Gartner report reveals.
According to the research firm's report released on Monday, 2011's revenue from this sector was a 16.4 percent increase from 2010's revenue of US$10.5 billion. The market had also been the second-fastest growing sector in the overall worldwide enterprise software market last year.
The strong growth had been driven by two major forces, Dan Sommer, principal analyst at Gartner, observed in a statement.
Firstly, IT continues to spend and allocate money to BI, despite constrained budgets, he noted, pointing to Gartner's 2012 CIO survey which showed that analytics and BI is still the top technology priority for CIOs in 2012. "BI projects remain relatively shielded, while a healthy portion of any discretionary money will be available for upcoming analytic initiatives," he said.
In addition, new buying centers are opening and expanding outside of IT, in line-of-business initiatives, taking an increasingly large stake of corporate spending, Sommer added. Key drivers for this are self-service data discovery tools, the race among vendors to provide business context through packaged analytics, and CFOs taking a renewed interest in BI and performance management.
Sommer also pointed out that the market in 2011 was still dominated by traditional on-premises solutions linked to PCs but key forces such as cloud, mobile, social and big data will play a pivotal role in increasing its adoption over the next 10 years.
He also added that the key forces would also "shift the center of gravity" away from BI and analytics being merely an enterprise IT push adopted by key stakeholders in lines of business, to one with a strong focus on individual context, inside and outside the firewall.
"In 10 years' time, everyone will be touched by analytics in a much denser and more frequent way than today," he said.
|Worldwide BI, analytics and performance management revenue estimates for 2011|
|Vendor||2011 Revenue (millions of US$)||Market Share (%)|
|Source: Gartner (March 2012)|
Top 5 vendors own majority of market
Delving into vendor analysis, the top five vendors continue to consolidate the market through a combination of acquisition, integration and upsell or cross-selling activities, resulting in them owning close to three quarters of the market.
However, the research firm found that more than 100 innovative vendors were "jostling for positions", some in hyper-growth mode, so this would not be "a market with closed opportunities".
SAP remained the top vendor in combined worldwide BI, analytics and PM software revenue in 2011, accounting for 24 percent of the market. This is followed by Oracle owning 15.6 percent of the market, SAS Institute at 12.6 percent, and IBM and Microsoft at 12.1 percent and 8.7 percent, respectively.
It was also found that all three subsegments of the market showed fairly even growth. Analytics application and performance management had 17.3 percent growth while BI platforms and CPM (Corporate Performance Management) suites had 16.3 and 16.4 growth respectively.
This shows that clients prefer a balanced approach to sourcing across a portfolio of techologies, rather than focusing on just one subsegment, Sommer noted. "It's not a build or buy decision, it's both."