Monash DSS Lab

Steve Remington, Peter O’Donnell & David Arnott

Market Strategy and Innovation in the Business Intelligence Software Industry:

A Preliminary Study

Agenda

• Background and Context• Research Question• Method Overview• Key Findings• Research Agenda

Business Intelligence Software

• The dominant technology for DSS in medium and large organisations

• A highest technology priority for CIOs for four of the last five years

• Organisations spend large amounts on this software (~ US$6 Billion in 2009)

Business Intelligence Software Market

2007: The Year of Consolidation

13.7%

1.2%

9.4%

18.2% 7.9%

10.6% 14.5%

2007: The Year of Consolidation

10.6%

13.7%

26.3%

10.6% 14.5%

“Rather than making their business intelligence products

better and easier to sell to discerning new customers,

they make sales through bundling their new BI offerings with other, more mainstream,

products”Nigel Pendse, BI Report 2008

The Market’s Response

The Question

Does a business intelligence software vendor’s innovation

process change when it is acquired by a large general

IT vendor?

The Method

• Single Case Study– Cognos Inc. being acquired by IBM in 2007

• Content analysis of 15 years of press releases and financial statements

• Compare pre-acquisition to post-acquisition innovation behaviour to see if there was a change

Class of Innovation

• Product Innovation (45% of total)– A product release that provides new or improved

software functionality.– e.g. A new product or version upgrade

• Usage Innovation (55% of total)– A product release that makes it easier to use

(and sell) an existing product.– e.g. A product usage or implementation template

PowerPlay Client

Impromptu

RIS Ltd

Scenario

PowerPlay Web Server

Interweave

PowerPlay Server

DataMerchant

Impromptu Web Query

Acta Technology

NovaView

4Thought

Impromptu Web Reports

Panorama

Relational Matters

LEX2000

PowerPlay Enterprise Server

Visualizer

DecisionStream

Query

NoticeCast

NoticeCast Software

3/95 12/09

6/95 9/95 12/95 3/96 6/96 9/96 12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09

BI Series

4.1 5.0

3.0 3.5Angoss Ltd

5.0

5.2

4.0

5.2

5.2

7.0

6.0

4.0

5.5

1.0 2.0

2.112.0

6.0

6.0

6.0

1.0 2.0

1.0

6.0

5.0

1.0

2.0

1.0

3.0

5.0

6.6

Planning Series

5.0

1.5

6.5

5.1

7.0

Web Services

Metrics Manager

1.0Aydatum

7.2

7.0

7.0

DataDirect Technologies

2.0

ReportNet

1.0

7.2

1.1

7.3

Frango

Composite Software

?.?

Controller

2.3

7.3

8.0

Go! Search

8.?

8.1

Celequest

Go! Mobile

Now!

8.?

8.?

Acorn Systems

Applix

8.3

Builder

Dashboard Accelerator8.?

TM1

9.4

Business Viewpoint8.?

8.4

Go! Dashboard

8.?

8.4

8.4

SPSS Inc.

8.?

Express

1.0Content Analyzer

Mashup Service

1.0

1.0

Symbol Legend

1.0

Product (Major Version) Product (Minor Version)Product (New) Technology Acquisition Technology OEM / LicensingProduct (OS / Platform)“N.n” = Major and minor version number of product

N.n

Timeline of Product Release & Technology Acquisition Events (03/1995 to 12/2009)

Product / Company

ImpromptuOracle Financials

PowerPlayPilot LightShip

PowerPlayOracle Express

Impromptu / PowerPlaySybase System X

ImpromptuIBM Database (DB2)

3/95 12/09

6/95 9/95 12/95 3/96 6/96 9/96 12/96 3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98 3/99 6/99 9/99 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09

HeadStarts, e-Applications...Oracle Applications

Symbol Legend

Timeline of Third Party Integration and Product Extensions Events (03/1995 to 12/2009)

ImpromptuPrism Directory Manager

ImpromptuSybase IQ

PowerPlayInformix MetaCube

HeadStarts, e-Applications...SAP R/3 & mySAP

Impromptu / PowerPlayIntentia MOVEX

HeadStarts, e-Applications...PeopleSoft HRMS

PowerPlayInformix MetaCube

Impromptu / PowerPlayMicrosoft SQL Server

Impromptu / PowerPlayOracle Database

Impromptu / PowerPlaySybase PowerDesigner

HeadStartsBaanERP

HeadStartsSSA BPCS

ImpromptuArdent MetaConnect

HeadStarts / e-ApplicationsJ.D. Edwards OneWorld

Impromptu / PowerPlayInformatica MX2 API

Impromptu / PowerPlayIBM Information Portal

e-ApplicationsIBM Commerce Suite

e-ApplicationsMicrosoft ASP Partners

PowerPlay Enterprise ServerPlumtree Corporate Portal

Analytic ApplicationsAll Vendors All Products

Upfront / EPP ProgramEnterprise Portal Vendors

BI SeriesPeopleSoft Higher Ed

Microsoft SharePoint

Product Name: e-Applications

Product Name: HeadStarts

Product Name: Analytic Applications

Impromptu / PowerPlayWhiteLight AnalyticServer

Product Name:Accelerator for SAP

DecisionStreamSAP R/3

Product Name: Analytic Applications

BI SeriesVarious Vendors/Products

Financial AnalyticsSupply Chain AnalyticsCustomer Analytics

CRM Analytics

Production Analytics

ReportNetVarious Vendors/Products

Enterprise PlanningMicrosoft Excel

Supply Chain Analytics

Plan-to-Perform BlueprintsVarious Vendors/Products

Sales CompensationAllocationsRisk Analysis

Initiative and Strategic Planning

Retail Store Operations

Workforce Performance

Bank Branch ProfitabilityClinical Trial ForecastingIFRSMFRCCR

Go! SearchVarious Vendors/Products

Retail Store Planning

Retail Promotion Planning

Workforce UtilizationBank Customer Profitability

Go! MobileVarious Vendors/Products

Go! NowIBM Content Management

Retail Merchandise Planning

Bank Risk Management

SAP BW

PeopleSoft EPM

IBM Info Mngt

IBM Lotus Notes

IBM WebSphereGoogle OneBox

IBM Infomation Server SaleForce CRM

HP NeoView

SAP BWAscential MetaBroker

Microsoft Office

Autonomy TechnologiesFAST Enterprise SearchSAP mySAP

Microsoft Excel

Financial Performance ManagementStrategic Financial Planning

OmniFind

SAP mySAP

x3

x3 x4

x2

x3

x2 x2x3

Windows MobileNokia Symbian

x2

Retail Planning & Monitoringx10

IBM InfoSphere Balanced Warehouse

x2

Upgrade to 3rd Party Product Integration

Initial version of Product Extension

Initial version of 3rd Party Product Integration

“N” = No of occurrences in the month if more than one

Improvement to Product Extension

xN

Cognos Product3rd Party Coy / Product

No significantdifference

→ Post IBM Acquisition

→ Post IBM Acquisition

→ Post IBM Acquisition

Research Agenda – Key Items

• What factors drive BI software innovation?• Is there a relationship between BI software

innovation, and a BI software vendor’s organisation structure or lifecycle stage?

• Are there identifiable types (e.g. product and usage) of BI software innovation?

• Does BI Software innovation (perceived or actual) impact buying decisions?

Concluding Remarks

• Results indicate innovation may reduce after acquisition by a large IT vendor.

• Further research is required to better understand what drives BI software innovation.

• Impact on BI software industry could be profound.

References

• Slide 1– Gartner, Inc. (2009b, February 18). Business Intelligence Ranked Top

Technology Priority by CIOs for Fourth Year in a Row. Gartner Newsroom. Press Release, . Retrieved January 1, 2010, from http://www.gartner.com/it/page.jsp?id=888412

– 2007 annual report from Business Objects, Cognos Inc and SAS Institute• Slide 2 & 3:

– Gartner, Inc. (2008a, April 1). Gartner Says Worldwide Business Intelligence Spending to Grow 11 Percent in 2008. Gartner Newsroom. Press Release, . Retrieved January 2, 2010, from http://www.gartner.com/it/page.jsp?id=636310

References

• Slide 4: – Pendse, N. (2009, November 1). In Praise of the Smaller BI Vendors.

Information Management Magazine. in, . Retrieved January 3, 2010, from http://www.information-management.com/issues/19_8/in_praise_of_the_smaller_bi_vendors-10016596-1.html?zkPrintable=true

Photo Credits

• Slide 1: Purchased from www.iStockPhoto.com• Slide 3 & 4: www.cognos.com | www.ibm.com | www.oracle.com |

www.businessobjects.com | www.microsoft.com | www.sap.com | www.sas.com | www.hyperion.com

• Slide 5: www.platon.net/files/ConferencePics/NigelPendse.jpg• Slide 6: www.flickr.com/photos/crystaljingsr/3914729343/sizes/m• Slide 7: www.cognos.com | www.ibm.com• Slide 12: Purchased from www.iStockPhoto.com

Monash DSS Lab