Monday, November 10, 2008

No 'No Wake Zone' in BI

The mega BI vendors are getting bigger while the little guys are struggling. That's the picture painted by recent 2008 earnings reports. IBM, Microsoft, and Oracle all grew in their third-quarter revenue, while MicroStrategy and Actuate suffered declines.

IBM takes the award for top BI growth. Partially due to its acquisition of Cognos, IBM's total software revenue grew 11.8% in Q3 2008 over the same period the previous year, with their Information Management segment expanding 26% to $2.849 billion. Information Management grew faster than any of its IBM peer software products -- WebSphere, Lotus, Tivoli, and Rational.

Microsoft's total quarterly revenue improved to $15.061 billion; a 9.44% increase from Q3 2007 revenue of $13.762 billion. Isolating Microsoft's revenue to just server and business division products, we see their BI-related software grew over 19% ($8.352 billion, up from $7.016 billion).

Likewise, big vendor Oracle announced quarterly earnings of $5.331 billion, up 17.71% from the previous year. Their new license revenues increased 13.8% to $1.237 billion.

Earlier in the year, the $2 billion privately-held SAS claimed a 16.6% increase in analytics software revenue over the previous year.

The wake of these giant ocean-liners may be causing the small BI dinghies to take on water and could threaten to capsize them.

MicroStrategy was hit with declining total revenues, bringing in quarterly revenues of only $33.7 million. The previous year was higher with $34.7 million. MicroStrategy's sales force struggled to sell products to new customers; new license revenue dropped 18% to $24.8 million from the previous year's $30.2 million.

Harder hit was Actuate, the smallest commercial vendor in the BI space. Actuate's quarterly revenue fell by 2.88% to $33.7 million. New license revenues for the quarter plummeted 25.37% to only $10 million.

For years, privately-held Information Builders has struggled to break past $75 million each quarter, with new-name customers probably providing for about 60% of that figure. The big vendors consolidating the BI market are wrecking havoc on that small BI vendor as well.

Actuate, MicroStrategy, and Information Builders are all facing challenges trying to sell their products to new customers. When buying BI software, customers are choosing those mega vendors most likely to stay afloat for the long term.

(All figures are in U.S. dollars)

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About Me

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I am a project-based software consultant, specializing in automating transitions from legacy reporting applications into modern BI/Analytics to leverage Social, Cloud, Mobile, Big Data, Visualizations, and Predictive Analytics using Information Builders' WebFOCUS. Based on scores of successful engagements, I have assembled proven Best Practice methodologies, software tools, and templates.

I have been blessed to work with innovators from firms such as: Ford, FedEx, Procter & Gamble, Nationwide, The Wendy's Company, The Kroger Co., JPMorgan Chase, MasterCard, Bank of America Merrill Lynch, Siemens, American Express, and others.

I was educated at Valparaiso University and the University of Cincinnati, where I graduated summa cum laude. In 1990, I joined Information Builders and for over a dozen years served in regional pre- and post-sales technical leadership roles. Also, for several years I led the US technical services teams within Cincom Systems' ERP software product group and the Midwest custom software services arm of Xerox.

Since 2007, I have provided enterprise BI services such as: strategic advice; architecture, design, and software application development of intelligence systems (interactive dashboards and mobile); data warehousing; and automated modernization of legacy reporting. My experience with BI products include WebFOCUS (vendor certified expert), R, SAP Business Objects (WebI, Crystal Reports), Tableau, and others.