We had the opportunity to host a CEO roundtable this past week for 20 CEOs of privately held software companies in the Business Analytics and Data Management market space, along with three panelists who are executives at major BI / ERP software companies. This event provided some great insights into the continuing evolution and consolidation of this software sector.
(note: these roundtables are informal, limited seating events for CEOs only, so I am not going to share any names or specific quotes. Nice try, but sorry....).
So, what is happening now, what will happen, and what DID happen in this space? In our not-so-scientific analysis of topics raised and discussed (guess I should be utilizing an appropriate stochastic algorithm to better defend my position? just wondering....), we observed a few timely trends:
Open Source: Most agree that open source is here to stay, and that it will comprise a part of the technology stack. Will it be part of the business intelligence / analytics applications layer? On that topic, our panelists as least did not see as much need or opportunity. Clearly, there are companies that are building out the database / DW part of the stack now with open source, and making a case to drive down the TCO. The general consensus is that open source is 'here to stay'; it is simply a factor in product strategy for the major BI / ERP players.
Software as a Service: Software as a Service (or SaaS) has not caught on in the BI space, compared to other sectors like CRM / SFA. Our panelists, and some attendees, have not heard of any significant interest from customers for this type of service. It could be a function of risk management; keeping confidential information such as HR records and financial projections inside the firewall. However even for BI applications that allow sales and marketing staff to better understand their customers and to optimize sales efforts, the market has not shown much interest in the way of a services model. We think that this could be a 'sleeper' opportunity that has not really come up yet in this software sector, but could very well in the next 12 months; perhaps focus on the SMB market.
EPM /CPM / BPM: BPM, or Business Process Management is the fasting growing segment in the BI / Data Management market sector. Growing out of departmental process management initiatives, the key driver now is to integrate across the enterprise, and to provide scorecards, reports, and other "C Level" deliverables with more confidence, so that predictive modeling and optimization initiatives are really based on the most complete and highest quality set of data available in the enterprise. Clearly, scorecards and reporting have driven the growth of the BI market, but now it is more imperative that these deliverables are utilizing all relevant data, which gets us to the next trend....
Data Integration: Data integration is not nearly as 'sexy' as scorecards and BPM, but it is clear that to deliver on the promise of true enterprise level process management, one needs the middleware (or 'plumbing' as affectionately termed by one of our panelists) to pull the disparate data sets together, to ensure minimal latency and high data integrity, and to build in redundancy. We think this is where there is significant opportunity for ISVs to fill "white spaces" in the major BI / ERP software company solution maps.
Operational BI: Also called "Democratization of BI" ( I used that term, and was told by one of our panelists that he coined that it......darn). Business Analytics for the masses, or at least knowledge workers or line managers whose duties are not necessarily to 'slice and dice', but to do more "mundane" things like: sell products, build organizations, and build mindshare. These users are not the traditional BI users that reside in the CFO or CEOs office; they have very specific needs, and want tools to deliver on exactly what they need to see. This is the area where unstructured data management may come into play as well: what information (structured, unstructured, spatial, whatever) is required to perform one's job well?
Faster, Cheaper: Of course, driving down the TCO of BI solutions is first and foremost in the minds of clients. What opportunities are there for ISVs to drive down costs and to improve performance of their BI solutions? Data query optimization, open source, ensuring data integrity; even portability of data sets all were discussed as opportunities to provide more value to customers
All in all, a great event; lots of good energy and a generally positive outlook for growth. We will be hosting another two of these roundtables in the BI space later in the year; the next will be in September. Potential topics include: exit strategies, views from the analysts, and views from the investors. Stay tuned.
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