Market Share Analysis: Business Intelligence, Analytics and Performance Management, Worldwide, 2010

Gartner Dataquest Research Note G00212433, Dan Sommer, Bhavish Sood, 18 April 2011, V3 RA2 04222012

A complement to “Market Share: All Software Markets, Worldwide, 2010,” this report analyzes 2010 revenue growth rates and market share in the combined business intelligence (BI), analytics and performance management software market.

The global recession that swept the world had a major impact on markets and for a period of time, especially the first half of 2009, paralyzed them. While IT spending overall was negative during that time, the BI market managed to grow 4.2% in 2009. In 2010, the global resurgence from stimulus packages, general improvement in the macroeconomy and new product releases contributed to a surge in spending.

As a result, BI software growth accelerated to 13.4% in 2010. As BI spending has far surpassed IT budget growth overall for several years, it is clear that BI continues to be a technology at the center of information-driven initiatives in organizations. Vendors also continue to aggressively market their capabilities in this area, so revenue growth is as much a function of vendor push as demand pull. The market can now count itself among those select enterprise software areas that have more than $10 billion in software revenue. As a maturing area, a large portion of revenue now comes from maintenance. But a new wave of lighter-footprint data discovery and packaged analytics applications are challenging existing paradigms in organizations, and that demand is rarely driven by IT organizations. Hence, while some areas of IT-facing BI (namely, reporting, online analytical processing and ad hoc querying) are commoditized with resulting pricing erosion, new islands of buying centers are emerging in business units across organizations.

Key Findings

• Marketisgrowing,usageisincreasing,andBIcontinuestobeatoppriority—“Therisingtide lifts all boats,” and most vendors in the space are growing. The BI market grew 13% —oneofthefastestratesinenterprisesoftware—toreach$10.5billionin2010.

• Consolidationcontinuesaroundthelargevendors—Thefour“megavendors”(SAP,Oracle,IBMandMicrosoft)continuetoconsolidatethemarket,owning59%share,anincrease of 2 percentage points, and surpassing market growth. In the BI platform and corporateperformancemanagement(CPM)suitesegments,theyholdclosetotwo-thirdsmarket share.

• Specialistvendorshavemixedfortunes—MostmidsizetolargetraditionalBI,CPMandanalyticpureplays,whilegrowing,arelosingmarketshare.MicroStrategyistheexception.

2• Datadiscovery/self-serviceBIvendorscontinuetheir“landgrab”

—QlikTech,TableauandTibco,inparticular,continuetobesuccess stories and are challenging the conventional paradigms around how to use and deploy BI.

• MarketconditionsintheUnitedStateswerefertile,andrevenuethere grew double digits, in line with emerging regions. This had a positive effect on worldwide growth.

• Packagedanalyticapplicationsandperformancemanagementgrew stronger than maintenance-heavy BI platforms, benefiting from a rebound in discretionary spending.

MARKET SHARE DATATable1providesmarketshareforthetop15BI,CPMandanalyticapplications/performancemanagementvendors.Table2providesmarket share by segment, and Table 3 provides a revenue split by geography.

Table2.BusinessIntelligence,CPMandAnalyticApplications/PerformanceManagementMarketRevenue,ShareandGrowthbySegment

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Table 1. Business Intelligence, CPM and Analytic Applications/Performance Management Market Share, Worldwide, 2008-2010

Growth (%) 2010

16.8

21.9

4.7

7.6

23.6

14.4

4.1

45.2

8.4

-6.0

1.8

22.7

-7.2

3.1

113.5

9.4

13.4

Growth (%) 2009

-1.8

5.1

3.0

14.0

8.5

5.4

-8.3

36.0

-5.3

-15.9

-3.5

0.2

-5.0

2.3

36.9

7.1

3.8

Share (%) 2010

23

16

13

12

9

3

3

2

1

1

1

1

1

0

0

14

100

Share (%) 2009

22

15

14

12

8

3

3

2

2

2

1

1

1

1

0

14

100

Revenue ($M)2010

2,413

1,646

1,387

1,222

914

338

288

205

151

147

115

80

67

49

38

1,463

10,522

Revenue ($M)2009

2,066

1,350

1,325

1,136

739

295

277

141

139

156

113

65

72

48

18

1,338

9,278

Revenue ($M) 2008

2,105

1,285

1,287

997

681

280

302

104

147

185

117

65

76

47

13

1,249

8,939

BI Vendors

SAP

Oracle

SAS

IBM

Microsoft

MicroStrategy

FICO

QlikTech

Infor

Information Builders

Actuate

Tibco

Minitab

Accelrys

Tableau

Others

Total

Change

+1

+1

2

+1

-1

+8

Rank2010

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Rank2009 1

2

3

4

5

6

7

9

10

8

11

13

12

14

23

Source:Gartner(March2011)

3

Table 2. Business Intelligence, CPM and Analytic Applications/Performance Management Market Revenue, Share and Growth by Segment

Growth (%) 2010

12.6

12.8

17.7

13.4

Growth (%) 2009

4.5

2.8

2.2

3.8

Share (%) 2010

63.7

20.6

15.7

100.0

Share (%) 2009

64.2

20.7

15.1

100.0

Share (%) 2009

64.2

20.7

15.1

100.0

Revenue ($M) 2009

5,955

1,922

1,402

9,278

BIPlatforms

CPMSuites

AnalyticApps/PerformanceMgmt. Total

Revenue ($M) 2008

5,699

1,868

1,372

8,939

Source:Gartner(March2011)

Table 3. Business Intelligence, CPM and Analytic Applications/Performance Management Market Revenue, Share and Growth by Region

Growth (%) 2010

17.8

19.5

6.7

3.0 18.3

22.9

3.7

13.4

Growth (%) 2009

5.2

14.1

1.5

6.4 6.1

17.3

2.2

3.8

Share (%) 2010

48

4

33

3 2

8

4

100

Share (%) 2009

46

3

35

3 2

8

4

100

Revenue ($M) 2010

5,021

369

3,426

266 204

858

378

10,522

Revenue ($M) 2009

4,264

309

3,212

258 172

698

364

9,278

North America

Latin America

Western Europe

Eastern Europe

MiddleEastandAfrica

Asia/Pacific

Japan

Total

Revenue ($M) 2008

4,052

271

3,260

243 162

595

357

8,939

Source:Gartner(March2011)

ANALYSIS

Overall Market Performance AnalysisWhen looking at the dynamics affecting vendor share, one can see that 2009 and 2010 had somewhat contrasting themes:

• From“maintenance”to“license”andfrom“build”to“buy”—In2009,mostvendorsfounditchallengingto sell new licenses as discretionary spending in IT budgets was frozen. As a result, vendors came up with increasingly creative strategies to squeeze maintenance revenue out of their customers. Two examples were SAP’sattemptatraisingmaintenancefeesfrom18%to22% (it didn’t happen in the end), and Actuate enforcing contractual fees for hardware upgrades that its existing customers did. The more maintenance-heavy BI

platform segment grew the fastest in 2009. Spending conditions improved in 2010, and in addition, most BI vendors had seminal newproductreleases(IBMCognosBusinessIntelligenceversion10.1;OracleOBIEE11g;newBIfunctionalityinSQLServer,SharePointandOffice;InformationBuildersWebFocus8;QlikView10,ActuateOneandsoforth),whichdroverenewedlicense selling efforts and released pent-up demand. Vendors sellinganalyticapplicationsandCPMespeciallybenefitedasdiscretionary spending conditions improved, enabling those less mature segments to bounce back.

• “Tactical”to(also)“strategic”—In2009,manystrategicprojects were put on hold. Tactical buying, largely in business units, was much more prominent, forcing vendors to focus on smaller deals. This benefited open-source and data discovery vendors. The trend of smaller projects in business units is not stopping. However, 2010 saw some delayed and prolonged

4Top Vendors Analyzed

SAPSAPisthedominantleaderinthecombinedBImarket(platforms,CPMsuites,andanalyticapplicationsandperformancemanagement), owning nearly a quarter of the market. The vendor is particularlydominantinBIplatformmarketshare.Impressively,SAPmanaged faster-than-average growth, capturing net-new share. This reversal of fortunes from last year is striking, especially as the new release of Business Objects 4.0 only affected sales in the last quarter of 2010. Additional factors contributing to this improvement include:

• OpportunitiesarisingwithERPenterpriselicenseagreements

• Theresurgenceofthemanufacturingsector

• Germany’simprovedspendingconditionsduring2010

• Theincreaseandstabilizationofsalesforceswithspecialistrather than generalist roles, after the massive churn that ensued following the acquisition of Business Objects.

OracleOracle, the No. 2 in the BI market, also had a very strong year, growing 22%. Growth was helped by the release of Oracle OBIEE 11g, releasing pent-up demand. The company is successfully toutingthe“redonred”stackbenefitsarguablyharderthananyother vendor, which is supported by findings in the BI platform MagicQuadrantsurvey;62%ofOracleBIusersuseOraclebusiness applications, and 82% of them have an Oracle data warehouseunderneath.Consequently,OracleoftenledBIsalesefforts with its analytic applications (OBIA) as a closely integrated componenttoOracleE-BusinessSuite,SiebelandPeopleSoft.OraclealsocontinuestobeamarketleaderinCPM,withHyperionFinancialManagementincreasingitsshareto28%inthatspace.

SASSAS is the only independent BI and analytics vendor able to match thelargemegavendors(SAP,Oracle,IBMandMicrosoft)intermsof size and capabilities, coming in as the third-biggest vendor, with 13%share.SASgrewBIrevenue5%,whichwasbelowmarketrates, as SAS came under stronger pressure from other vendors encroachingonitsmarket“sweetspots.”ButitalsoreflectsSAS’s subscription-based pricing model and large installed base, which smooth out peaks and valleys in growth, providing a more predictable and reliable growth path.

During 2010, SAS benefited from the increased market noise around analytics, where SAS has its core capability. SAS held on to market share leadership and saw most growth in analytic applications(13%)—whereitholdsthewidesthorizontalandverticaldomaincapabilitiesintheindustry.PerformanceinBIplatformsandCPMsuiteswasmoresubdued.SASholdssignificant positions in those segments, too, but Gartner rarely hearsofthevendorbeingconsideredfor“breadandbutter”BIplatform(apartfrominstatistics/dataminingscenarios)orCPMprojects outside its installed base.

strategic discussions finally close, giving a boost to those vendors(suchasmegavendorsandMicroStrategy)thatcandolarger scalable projects.

• Open-sourcegrowthslows—Open-sourcevendors,suchasJaspersoft,PentahoandActuateBIRT,continuedtogrowfasterthanthemarketaverage—buttheydidn’tstandoutas much as in 2009, showing that, when money returns to the market and to proprietary products, open source loses some of its momentum. Open-source revenue from all vendors combined represents less than 1% of the market in monetary terms but is a significantly bigger footprint in terms of usage.

• SaaSnotyetadisrupter—BIsoldassoftwareasaservice(SaaS) is still lacking real uptake. There are myriad startups in the space, but Gartner estimates that only one, Host Analytics, hasbrokenthe$10millionrevenuethreshold(intheCPMspace). The larger vendors also offer alternatives here, but with very small minority stakes of their revenue. BI, analytics and performance management sold as SaaS does not exceed 2% of the total market.

As shown in Table 3, growth rates across regions varied significantly during 2010. The traditional characteristics of emerging regions by default growing faster cannot be applied to this year. Rather, similarities can be found across macroregions. The Americas did extremely well, and both North and South America grew more than 17%. Latin America is still emergent and is hence growingrapidly.ChileandColombiawerethetwofastest-growingcountries worldwide. However, North America also grew extremely well,fromahugebase.TheUnitedStatesbenefitedfromthefiscalstimulus and quantitative easing packages put in place following the financial crisis. Also, many companies that had made massive layoffs looked to BI to help fill productivity holes. Together with Australia,theU.S.wasthefastest-growing“advanced”nation,despite holding a massive 44% of the worldwide market.

Europe was sluggish across the board, both east and west, as the region struggled with sovereign debt and recessionary environments. However, relatively healthy market pockets could be found in Germany and Switzerland, parts of the Nordics (Sweden andFinland),andRussiaandUkraine.ContrastingtoEurope,theMiddleEastandAfricagrewinthedoubledigits.

Asia/Pacificcontinueditsgrowthstoryandgrewanimpressive23% in 2010, compared with 17% growth posted in 2009. Among the segments, analytical applications posted the highest growth (more than 30%), which we believe is due to the business demand for analytics by businesses across the region. Due to the lack of custom-built information infrastructure, buying packaged analytical applications is easier and faster. As Asian countries race toward International Financial Reporting Standards migration deadlines, we willcontinuetoseegrowthofCPMsuites,whichstoodatalmost24% in 2010. BI platforms continued to be the largest subsegment in 2010, growing at 21.3% and crossing the half-billion mark in licenseandmaintenancetoreach$577millionin2010.

5IBMIBMisinvestingheavilyinallaspectsofBIunderthemoniker“BusinessAnalytics”asacornerstoneofthecompany’sSmarterPlanetstrategy.During2010,theacquisitionofSPSSfromtheprevious year was fully integrated. However, Gartner counts the majorityofthatrevenueinCRMundermarketautomation.IBMalsoacquiredClaritySystemsintheCPMspaceforimprovedfinancialreporting and disclosure capabilities, making that segment the fastest growing. From a BI software perspective, Gartner estimates IBM’sgrowthtohavebeen8%,whichisbelowthemarketgrowthrate. While some customers are choosing the more operational, application-drivenBIstrategiesofSAPandOracle,tobefair,IBM’smodel is to use business analytics to drive growth also in analytic solutions, services and hardware, so software market share tells onlypartofIBM’sBIstory.

MicrosoftMicrosoft’sBIrevenueishardertobreakoutandcontainsalargerelement of estimation as virtually all functionality is embedded in SQLServer,SharePointandOffice.ButMicrosoftcontinuestoexpand its BI footprint with the help of these products as a vehicle and driver for sales. Gartner estimates the vendor to be the fifth-biggest BI vendor in terms of revenue (and the third in BI platforms). ButGartnerend-userqueriesandsurveysindicatethatMicrosofthas a bigger share than that in terms of usage.

Notable Vendors

MicroStrategyAccording to Gartner estimates, of the larger traditional BI pure-play vendors(MicroStrategy,InformationBuilders,ActuateandSAS),MicroStrategywastheonlyvendoroutpacingmarketgrowth.Thecompany has done a good job positioning itself as the independent alternative on BI platform shortlists, while being able to reach out to business user constituencies and championing the drive into mobility and tablets. Two additional releases of version 9.1 helped adoption in 2010 as it continues to enhance performance, and MicroStrategy’smobilityeffortsareshowingintendedresultstosellto business users as it battles data discovery vendors.

FICOAfterpostingnegativegrowthin2009of8.7%,FICO(formerlyFairIsaac) showed positive growth of 4.1% in 2010, which compares with growth of 17.7% for the analytical application segment overall. FICO’sgrowthrateforthissegmentreflectsongoingslownessinthe financial services sector, which accounts for the majority of the company’s analytic application business. It also reflects the earlier (2009) divestiture of several telecommunications products from thecompany’sanalyticalapplicationportfolio.FICOcontinuestobecome leaner and more focused, with the intention of growing its banking, insurance, healthcare and retail analytics portfolios through a focus on the customer life cycle, which includes applications for marketing, originations, customer management, collections, recovery and fraud.

QlikTech“Datadiscovery”(light-footprint,in-memory-basedvisualtools)continuesitsmomentumasanalternative—andincreasingly,alsoasareplacement—totraditionalBIplatforms.Inthisspace,

QlikTechisthetorchbearer.Thecompany’sinitialpublicofferingin 2010 was the first in the BI space for many years. Strongly recapitalized,QlikTechcontinuetogrowaggressivelyatmorethan45%,andthemajorityofitsrevenuecomesfromnewlicensesales,boding well for future revenue streams. The company still has only 3% market share in BI platforms, but it is on a strong growth trajectory.

TibcoTibco (Spotfire) grew much above the market rate, at 22%. The company has a foundation in a strongly visual tool, but it is also adding process-driven (through the Tibco heritage) and predictive (through the acquisition of Insightful) thinking to its strategy.

TableauTableau, another data discovery tool vendor, can claim the honor of being the fastest-growing vendor of all surveyed this year, clocking in at 114% growth. Growth is spurred by the company’s well-deserved reputation in areas such as ease of use and functionality. TableaufollowsQlikTech’sgrowthtrajectorybutisafewyearsbehind in terms of size.

Mergers and AcquisitionsTable4showsmergerandacquisition(M&A)activityfrom2008through 2010 in this market.

Vendors CoveredHere is a comprehensive (but not complete) list of vendors we coverandconsiderinourMarketSharestudy:

• Vendorswithmorethan$10millioninBI,analyticsandperformance management software revenue (not counting professionalservices),brokenoutin“MarketShare:AllSoftwareMarkets,Worldwide,2010”:

• Accelrys,Acorn,Actuate,ARC,arcplan,Attensity,Bitam,Board,Clarabridge,ClaritySystems,Corda,CorporatePlanning,Datawatch,DoubleStar,DimensionalInsight,ExactSoftware,FICO,HostAnalytics,IBM,iDashboards,Infor, Information Builders, Jaspersoft, KXEN, Lawson Software,LogiXML,Microsoft,MicroStrategy,Minitab,Oracle,PanoramaSoftware,Pentaho,QlikTech,RogueWave,RocketSoftware,Salient,SAP,SAS,SPSS,Tableau,Tagetik, Targit, Technology One, Teradata, ThinkAnalytics, Tibco, Tonbeller and Visual Numerics

• Othervendorswithlessthan$10millionintotalBI,analyticsand performance management software revenue (not counting professional services) include:

• 1010data,A3Solutions,ABMTechnologies,Abrige,ACS(Xerox),Acteon,ActiveStrategy,AdaptivePlanning,Advizor Solutions, Affinity Global Solutions, Alight, Altair (HiQube),Altosoft,Anaplan,Angoss,Antivia,Aonix,Aruspex, ASgroupDillon, Attivio, Avisen (Inca Software), Basware,Birst,Bissantz,Blackbaud,BlueSky,C3Solutions,CATechnologies,Calumo,Carpio,CDCSoftware,

6

Centrifuge,Cerner,Chordiant,Cintac,ClearFinancialsStrategyManagement,COASolutions,Coheris,CorporateRenaissanceGroup,Corporater,Cubeware,DecisionLens, Eclipsys, Emagia, Epicor, eThority, Excel Data, Exie, ExOpen Systems, Fujitsu, FuseTalk, FusionOps, GoodData, Glassbeam, Hummingbird, Hypergene, IDBS (InforSense), Indicee,InetSoftTechnology,InfoZoom,InPhase,Insightformation, Interactive Reporting, InterSystems, iStrategy,JinfonetSoftware,Jonova,KCIComputing,KNIME,KnowledgeAdvisors,LeadSoftware,Lyzasoft,McKesson,MEDai,MedAssets,Mede,Medisolv,Merkur,Midas,MIK,MitsubishiElectricInformationTechnology,Mondelio,MyABCM,myDials,NeutrinoConcepts,NewsPatterns,nexDimension,Nomis,Oco,OpenViz,OrcaEyes,Palladium,Panopticon,Panoratio,ParisTechnologies,PerformanceSolutionsTechnology,PivotLink,PortraitSoftware,Prelytis,Premier,Prevero,Procos,Prodacapo,Profitbase,Prophix,Prudsys,QPR,Quantivo,Quantrix,QuartetFS,QuestSoftware,Quiterian,Rapid-I,RelationalSolutions, Revolution Analytics, River Logic, Roambi, Satori Group, SiSense, SL, Space Time Research, SpagoBI,

Buyer Acquiree Date of Acquisition

Actuate Xenos February 2010

IBM Exeros May2009

IBM SPSS July 2009

IBM ClaritySystems October 2010

IBM Netezza September 2010

IBM OpenPages September 2010

IBM Unica August 2010

IBM Coremetrics June 2010

Microsoft DATAllegro July 2008

Microsoft FastSearch&Transfer January 2008

Microsoft Zoomix July 2008

Oracle SunMicrosystems April 2009

Oracle HyperRoll September 2009

Oracle Golden Gate July 2009

SAP Sybase May2010

SAS Teragram March2008

SAS IDeaS August 2008

Tibco Insightful September 2008

Source:Gartner(March2011)

Table 4. M&As in the BI Market, 2008-2010

SpiderStrategies,SQLPowerGroup,StatSoft,Systema,Targetor, Teradata, ThinkFusion, Thomson Reuters (Solucient),Vemo,Visuali/o,VisualInsight,VisualSense,Whitebirch, WingArc Technologies, Xlerant, YellowBrix, Yellowfin, Zap Technology and zetVision

EvidenceThis report required data collection and preparation of market statisticsinformation.Prevailingmarketconditionsandpoliticaland economic events that affect vendor performance, such as regulations,M&As,aslowedworldwideeconomicrecoveryandnew-version migration, have been taken into account.

Gartner uses public sources of information and works with software vendors to establish estimates for the market. Information from Gartner’s secondary research and internal community meetings has also been used to arrive at certain conclusions. The data in this researchreportispublishedasGartnerestimates/opinion,notasfacts that the vendor reported.