Strong platform players as BI innovators

SINGAPORE & HONG KONG: A new survey-based IDC report finds that platform vendors such as IBM and Microsoft are dominating the ranking for both product and process innovation in business intelligence software across the four key Asia/Pacific countries: Australia, Korea, India, and the People's Republic of China (PRC).

The report titled "Business Intelligence Software Market: A Mindshare Perspective across key Asia/Pacific Countries, 2008" seeks to understand how companies in the four key Asia/Pacific countries perceive the leading Business Intelligence (BI) solution providers with regards to innovativeness of their products (including product performance, features and pricing) and processes (including business model, channel and partnering, and customer support) offerings.

"IDC believes that innovation mindshare will gain in significance as BI is transforming and converging with other technologies while expanding into new market segments," says Ullrich Loeffler, Program Manager of IDC’s Australia and New Zealand Software Research. "In order to convert high innovation mindshare into BI adoption and market share, technology providers will need to prove that they can provide business-relevant BI solutions that ensure long-term and sustainable business value to their customers."

The relatively high mindshare of platform vendors is somewhat surprising considering that both IBM and Microsoft have a relatively short history and track record in this respective market. Nonetheless, the high innovation rating indicates that these vendors were able to expand their existing brand value from other software segments to their BI offerings.

BI-module bundling with other technologies such as database and enterprise applications (CRM and ERM) may be named as one of the enablers of this brand value exploitation. Furthermore, the positive market perception can be related back to significant innovation investments these vendors have made. These includes IBM's "Innovation That Matters" campaign which launched globally in early 2006; Microsoft's "Voices for Innovation" campaign which launched in India in December 2006; and the opening of Microsoft Innovation Centers (MICs) across the AP region.

Despite the fact that IBM and Microsoft have shown a high innovation rating, it is not reflective of the vendors' revenue-based BI market shares in the same countries. Vendors coming from a pure-play BI background such as SAS Institute, Hyperion (Oracle), Cognos (IBM) and Business Objects (SAP) remain the leading performers when market revenue is concerned.

Ullrich adds: “These ’traditional pure-play’ BI vendors have a mindshare disadvantage compared to their larger multinational competitors due to the relative lack of product breadth and resources strength. Having said that, these BI vendors are still very capable of improving their value propositions and communicating their innovation story to the broader market audience. Their extensive experience in BI product development coupled with expanding partnerships are being appreciated by leading adopters which references would draw others to contemplate future investments in.”

The survey also revealed that mindshare on BI technologies are still in the ‘settling in’ phase. The proportion of respondents that answered "don't know" or "no opinion" in the survey has increased significantly from 2007 to 2008. With the exception of Australia, indifferent respondents only made up single-digit percentages when asked the same question a year ago. IDC believes that the market consolidation activities that took place during 2007 and into 2008 have not yet resulted in a settled vendor perception for many respondents.

Source: IDC