A Shifting Landscape

By Kim S. Nash  |  Posted 2002-04-15 Print this article Print

Companies spent $4 billion last year on business intelligence software to synthesize and interpret a sea of data. Navigating among competing vendors who claim to do the job requires some intelligence as well.

A Shifting Landscape

Big applications vendors are moving into the business intelligence space, upsetting the traditional per-user pricing model that business intelligence vendors like.

PeopleSoft, Siebel Systems and SAP, among others, now have basic analysis features in their enterprise suites; IBM, Microsoft and Oracle have added or plan to add analysis capabilities to their databases. All of these applications are typically sold via enterprise licenses. Now that some form of analysis is included in those flat rates, some users question whether they need separate, expensive tools whose licenses they must manage and track, user by user.

Alta Resources, a call-center outsourcer in Neenah, Wis., has chosen PeopleSoft's soon-to-debut analysis features over third-party tools. It's better to have such capabilities as part of Alta's core enterprise applications than to have to sweat the integration of two vendors' products, says Bill Parry, chief technology officer at Alta.

The response of tool vendors to the challenge is twofold. First, in true tech-industry style, they are partnering with those that threaten them. Tools vendor MicroStrategy, for example, has a deal to bundle limited versions of its analysis products with enterprise applications from Retek. Cognos has a similar arrangement with PeopleSoft.

Second, several tools vendors now offer analysis suites for specific vertical industries—telecom, pharmaceuticals, banking—and horizontal tasks like customer service, supply chain management, and procurement.

"Instead of the IT department buying a bunch of tools and building their own apps on top of them, we're seeing a trend toward packaged analytic applications," says Dan Vesset, an analyst at International Data Corp. "The theory is, you buy it and it runs."

Technology managers must carefully consider a vendor's financial health along with its technology savvy.

"Stability matters a lot right now," says Gartner Inc. analyst Howard Dresner. "The old economy is back, and it's pissed," he says, referring to the fact that many tech vendors are reporting financial losses or are going under.

Financial troubles at MicroStrategy knocked it out of the running at Sara Lee Bakery Group, says Chief Information Officer Steve Brazile. In 2000, the bakery was looking for an analysis tool for 500 users to formulate pricing and promotions. At that time, MicroStrategy had slashed staff by 60% and lost $261 million for the year. "We didn't feel comfortable that they would be around," Brazile says. He went with Business Objects instead.

Another reason to choose carefully: Once a business group adopts a tool, it's darn tough to replace it. Analytical tools are quite complex. People build whole careers around specialized skills. "It's akin to telling a Cobol coder, 'You're going to write in Java now,'" says Brian Kilcourse, chief information officer at Longs Drug Stores.

By no means do you need business intelligence tools to do business intelligence, says Ellis Moore, vice president of information technology at Nobel Biocare USA, a $250 million maker of dental implants. Moore evaluated products for eight months before deciding none would do. The company wanted something that could easily extract data from SAP enterprise resource planning systems, relay it to a relational database, then layer it so sales agents could get more detailed information via Web browsers and a dial-up connection. Nobel Biocare built the system itself.

"A lot of people just buy the tool based on a vendor demo," Moore says. But don't fall for demos. His advice: Grill salesmen and women on whether the products can manage your particular data sources.

Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.

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