Open Source Business Intelligence: IDC survey predicts little impact

Dan Vesset, research director for Analytics and Data Warehousing at IDC, wrote an interesting commentary about a recent survey conducted by IDC and DM Review on Business Intelligence.

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IDC’s research states that the Business Intelligence market moves in 15-year cycles:

  • from 1975 to 1990 characterized by production reporting on mainframes;
  • from 1990 to 2005 characterized by friendy client/server solutions;
  • the current market cycle, focused on expanding the reach of Business Intelligence.

Talking about software upgrades, IDC noticed that:

BA software vendors want and need rapid adoption of newer versions of their software to increase satisfaction levels and reduce support costs. It also ensures a steady stream of maintenance revenue. When adoption of upgrades slows greatly, customers are sending a signal that they do not see additional benefits in new products relative to the costs of implementing and supporting the new products. According to the survey, 45 percent of organizations upgrade BI software within the first year or as soon as it becomes available. Close to 80 percent of organizations upgrade their BI software within two years of release.

IDC survey in other words says that at this stage in the BI market there is no much space for disruptive innovation – described as a technology having characteristics that traditional customer segments may not want, but interesting for marginal or new segment looking for a cheaper and simpler solution.

Interesting open source BI software. It makes sense that a tool perceived to have just enough functionality at a low cost would be appealing to many companies with simpler reporting requirements. Several community projects and commercial companies have emerged to address the potential market for open source BI software. Interest among respondents for these offerings was modest, with 18 percent evaluating the products. However, the majority of respondents indicated no interest in the coming year. These tools will need to mature and prove themselves in the market before wider adoption can occur. Companies will continue to feel comfortable in allocating budgets toward commercial products, especially as system integrators largely choose to recommend these products and offer resources skilled in their implementation. The functionality available in open source products may be suitable as a replacement for commercial products, but skepticism still abounds. In markets where software is directly facing end users rather than just IT employees, open source alternatives have been slowly adopted. IDC does not believe open source BA products will have significant impact on the market in the coming year.

The Open Source BI market need customers demanding for products not as good as the proprietary products currently in the market. Moreover System Integrators have to get proficient with Open Source BI products, otherwise uncertainty and skepticism will prevail.

I know people from the Corporate Open Source project called SpagoBI, and I’m going to meet them next week in Sardinia. I’ll be back with more news about the OS BI market.

Technorati Tags: Open Source, Business Intelligence, disruptive innovation