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Open Source Expansion Into The Business Intelligence Mainstream

by Lyndsay Wise, President, WiseAnalyticsWednesday, August 26, 2009

The expansion of open source BI towards becoming mainstream within the business intelligence market has taken place over the last two to three years.  Organizations are starting to look at open source as a standard within their companies or alternatively are evaluating open source BI, data warehousing and ETL along with traditional business intelligence offerings.  And even in some cases, they are replacing their traditional BI solutions with commercial open source alternatives.  So what is it about the combination of business intelligence and open source in today’s market that has created a shift in the way organizations evaluate potential solutions?

This article looks at how and why open source is becoming more mainstream within the general business intelligence market.  As organizations become more mature in their BI deployments and as technology becomes more robust, the ability to evaluate a broader range of solutions provides organizations with an advantage over solution providers because they can pick and choose what solution will work best within their organization. 

The natural expansion of open source

As knowledge about open source solutions increases, many organizations are expanding their search to include open source alternatives instead of looking solely at mainstream BI offerings.  This creates a shift in the market whereby the perceptions of low-cost software translates into a criterion of how BI should be evaluated.  Add to this the fact that the business intelligence industry as a whole is in constant flux as vendors consolidate, solution diversity increases, and other approaches (such as software as a service and open source solutions) start to entrench themselves and become one of the traditional methods of deployment.  And what this means for organizations is that more diverse solutions exist.

This diversity enables organizations to look more broadly at solution offerings in general.  Where open source may have been seen as a fringe technology in the past, now it is becoming a viable option for organizations and is increasing in overall popularity.

Brian Gentile, the CEO of Jaspersoft sees “significant acceleration in adoption just over the last 8-12 months. The economy is certainly driving some of this as more IT teams are under great strain to do more with less.  But, don't let this fact obscure an even more compelling reason for the growth we're experiencing: open source BI software has reached a level of maturity and functionality that puts it on par with aged, proprietary offerings and even beyond them in certain areas of capability.  Multi-tenant architecture and in-memory-based multi-dimensional analytics are two examples….  This is absolutely paramount in today's environment of uncertainties and more organizations are betting on open source with their now lighter wallets."

The economic downturn also creates an environment in which organizations are more likely to consider solutions that they may not have looked at beforehand.  This means that organizations may expand their search to include solution providers beyond the larger BI vendors and towards those offering alternative solutions.  Whether being alternative means offering different deployment options, solution management, or feature and functionality differentiators, organizations are open to expanded solution evaluations.

Implications of open source expansion

Now that open source is a contender for many organizations and becoming a solution evaluated in relation to mainstream business intelligence projects, there are implications for the overall business intelligence market.  These include expectations of lower software costs, higher levels of interactivity and the increased ability for customization.

As mentioned above, open source solutions are available free of cost.  Developers are required to develop and customize solutions, but the source code is available for these developers to play with.  In some cases, commercial open source costs are based mostly on support and services as opposed to the actual cost of software.  What this means for BI in general is that more vendors offer free trial versions or free offerings as a subset of their overall available solutions.  In addition, organizations are beginning to expect more for less as opposed to paying astronomical software and licensing costs.  As open source continues to expand, these customer expectations will translate into demands as more and more offerings are available for little or no cost with an increased focus on value-added services and support. 

The true value of open source is its focus on an interactive development community and the use of social networking as a way of constantly improving solution offerings, collaborating on projects and the like.  Where several years ago, solution providers could get ahead without an online community, today this is not the case.  Customers expect to be able to communicate with peers, have access to documentation and continuous insights and be kept up to date with new features, functionality and general initiatives.  Even though open source may not be the direct cause of the increasing adoption of social networking to create user groups and peer networks, the reality is that open source BI solutions have been focusing on this model since their inception and it works in terms of developing a strong customer base and autonomy over the future development of the solution being one of the most efficient ways of interacting with product consumers.

Open source requires customization and additional developer interaction but at the same time these solutions are highly customizable.  Although certain organizations want a plug-and-play version of BI, other organizations want a highly customizable solution that they can play with internally.  Because open source allows for this, as do some other mainstream solutions, there is an increasing expectation that organizations can interact and customize their solutions to their liking.

Using open source to replace mainstream BI

With all of these market changes and with organizations evaluating open source as part of their overall software evaluations, there is also potential for organizations to choose open source in lieu of other BI solutions or as a replacement of what they currently have in-house.  Pentaho sees this happening much more regularly when engaging potential customers.

“Historically, customers have approached open source vendors for new BI deployments, as a complement to their existing BI systems,” says Lance Walter, VP of Marketing at Pentaho.“  Now, because of a combination of factors like price increases, upgrade pains and technology modernization efforts, more organizations are choosing Pentaho as a replacement for their existing proprietary BI deployments.”

Overall, as budget constraints increase and the justification for software becomes more crucial in determining the overall benefits of BI deployments, organizations start to broaden the way they look at business intelligence and what solutions best fit their current environments.  In many cases, this includes the evaluation of open source solutions instead of, part of, or alternatively in replacement of traditional BI offerings.

About the Author

Lyndsay Wise is an industry analyst for business intelligence. For over seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay is the channel expert for BI for the Mid-Market at B-eye-Network and conducts research of leading technologies, products and vendors in business intelligence, marketing performance management, master data management, and unstructured data. She can be reached at lwise@wiseanalytics.com. And please visit Lyndsay's blog at myblog.wiseanalytics.com.


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