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Breaking BI Bread, or Mixing Livestock Fodder?

by Madan Sheina, http://www.ovum.comTuesday, October 12, 2010

Vendors and analysts continue to talk up various trends in business intelligence. But what's real and what's hype? That got me thinking about bread…yes the kind you toast and butter.

Bread is made from wheat, which is first separated from the chaff by a thresher-like machine. Wheat is useful. Chaff is, well, chaff.

So I thought I'd apply my own mental thresher to some of the hyped up trends that vendors and analysts are talking up today. Will they become bread or livestock fodder?

Data Warehouse Appliances

Turnkey data warehouse appliances are touted as cheaper and low-risk alternatives, not replacements, to traditionally expensive and lengthy enterprise data warehouse (EDW) projects. Weary that they're up against formidable competitors, appliance start-ups have been careful to position their products as complementary offerings for specialized complex analytic query processing of a large subset of the transactional data that would otherwise grind an EDW to a halt.

Netezza, Datallegro, Kognitio, and Greenplum (in partnership with Sun) have already rolled out data warehousing appliances and start-ups like Dataupia, Vertica, Calpont and Paracell are preparing their own proprietary systems. Both want to challenge incumbent enterprise data warehousing providers like NCR Teradata, Oracle, and IBM, which are also starting to embrace the appliance concept. Teradata has always been an appliance, albeit an expensive one. And recent moves by IBM, with its Balanced Configuration Unit, and Oracle, with its Information Appliance Initiative, continue to validate the market for data warehouse appliances.

The once-proprietary appliance market is also evolving around commodity software and servers to gain market acceptance. Appliance vendors are also looking to tap into the channels of these commodity suppliers to bring their products to market quicker.

Wheat or Chaff? Love them or hate them, data warehouse appliances are not a passing fad and are here to stay. Driven by the relentless growth in transactions and data volumes, and riding on the back of Moore's technology cost curve, scalable and performance-optimized data warehouse appliances have the potential to add value to existing EDW initiatives without expensive upgrades.

Appliances hitting the market today are unrecognizable from the proprietary and expensive appliances of yesteryear. A new generation of turnkey appliances built on commodity hardware and open source software components is starting to flood the data-warehousing market.

Start-ups like Netezza and Datallegro have worked hard to make appliances a viable product category. Interest in appliances from big vendors like IBM, Hewlett-Packard, and Sun, has more or less validated the market. The next challenge is to create a critical mass of customers. Some big wins are expected in 2007. Most of these will be as an adjunct to enterprise data warehouses, but perhaps some will take business from market incumbents like Teradata, IBM, and Oracle. There will also be some failures. Getting the appliance model right is tricky, and several promising appliance start-ups have already dropped out after trying to plug in appliances built on proprietary platforms.

Open Source BI

Open source was once seen as a "maverick" option in corporate IT. But that's no longer the case and vendors like Red Hat, MySQL, and Novell are creating a new "comfort level" around open-community-developed software model.

After making huge strides in the operating system and application server markets, open source is setting its sights on BI. The popularity of open source technology as a driver for lowering the cost of traditionally expensive BI implementations is gaining increased momentum in the market, especially as more companies understand and grasp the business and technical benefits. For commercial BI vendors like Actuate, open source presents an interesting new hybrid business model, allowing them to skim off services revenue and to eventually coax early open source customers onto their commercial BI platforms.

Wheat or Chaff? It is hard to tell. Open source BI is aimed at lower-end of the market, namely basic reporting and the Java development community (as is the case with Actuate), rather than complex analysis or large enterprise-scale BI deployments. It's true that JasperSoft and Pentaho are assembling more ambitious BI suites, but they still tend to be feature-limited, and are unlikely to overtake and replace Business Objects or Cognos installations anytime soon. The question is whether this is something that customers will be prepared to wait for? Complex and enterprise-scale BI and analytics will traditionally remain licensed software for the next five years at least. One thing is clear. Open source is no free lunch. All the hard work and spending comes when you take it home. Ultimately, the likes of JasperSoft, GreenPlum, and Actuate can only take open source so far. It may take a real heavyweight like IBM or some other major vendor that does not currently have BI tools in its portfolio to throw its weight behind an open source toolset to make it a really credible alternative to commercial BI products. When or if open source finally breaks into the mainstream BI market, BI vendors will need to tweak their business models to (re)define the value they offer customers.

Mobile BI

The notion of mobile BI delivering analytic data and performance metrics on mobile devices has been kicking around since the 1990s. Technical and social barriers have hindered adoption of mobile BI in the past. But with improvements in application infrastructure and bandwidth, technical incompatibility issues being ironed out, and Blackberry devices now a de rigueur tool for business professionals on the go, organizations are perhaps in a better position to realize its value.

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