The ICT industry consists of a lot of different components and skills, but acquisitions over the past year or so have shifted more power to the big fellas. This consolidation — especially in the business intelligence and performance technology sectors — will impact client and vendor relationships, technology directions, customer support, and who's who.
The consolidation in the market has not simplified vendor selection decisions for users. If anything it has made them more complicated, according to Gartner, because the acquisitions have thrown existing road maps into confusion.
For organisations that have previously invested heavily in ERP, BI/performance management now becomes a natural extension of their core enterprise systems or, alternatively, if the application is home-grown the reliance is now on an integration vendor.
The competitive environment has changed quickly following acquisitions worth more than US$15 billion in 2007. More than 50 BI vendors have been part of this market over the past 15 years or so, all offering systems designed to interoperate with a variety of databases, operating systems, and applications.
The competitive dynamics have often flip-flopped in the BI space, sometimes involving partners, at other times being head-on rivals. It's been fascinating watching the consolidation games play out. There are also many CIOs and CFOs who love the idea of playing vendors against each other in the hope of increasing their leverage. But are they now willing to do so at the expense of having to maintain several architectures?
The dynamics of open systems versus closed systems will also be a consideration. MicroStrategy, SAS, and IBI will continue to be independent, focused on BI, and optimised for open systems solutions. The rest will operate in the closed environments of their parent companies.
Across the ICT industry in Australia there is a long list of vendors that had built a reasonable market presence in the marketplace prior to getting the call that they were going to be absorbed by a "big fella", often they are no longer heard of in the marketplace. Most of them had high profile local leaders who suddenly disappeared, hopefully into a new life. Retention of talent is certainly not assured, no matter how wonderful the acquiring firm perceives itself to be in friendly acquisitions.
Who is the next to be acquired? HP is expected to target some acquisitions to further strengthen its software play. Who will remain independent — SAS, SPSS, Informatica, MicroStrategy, QlikTech and Information Builder (IBI)? There are many vendors hovering around wanting to gain a bigger share of the infrastructure, applications, BI/PM, and services marketplaces. Some of them are wild cards, like the services vendors, while some of them are home-grown vendors from markets such as China and India.
According to Gartner, the smaller organisations that lack a current base of investments in BI systems will increasingly turn to service companies to deliver services that integrate, analyse, and report on data from numerous systems. Wider adaptation of SaaS business models will also make analytical applications more widely used, particularly among midsized companies.