Forecasting the future of business intelligence

Business intelligence is off the chartsLast week Business Objects signed a deal with SPSS to link its predictive analytics application to the Business Objects platform.

This week SAP will announce a deal with Visual Numerics (VNI) to embed its libraries of algorithms for predictive analytics and forecasting into TREX, a structured and unstructured data processing component of NetWeaver.

Last May, Teradata also struck a deal with VNI to integrate its libraries into Teradata applications and tools.

So, not only are the big guys buying up the smaller BI guys (SAP is acquiring Business Objects, and IBM snapping up Cognos), they are also enhancing their BI with BA (business analytics), aka forecasting -- once the domain of two major players, SAS and SPSS.

What do these recent events tell us?

For one, it says that it may have taken five or 10 years for the enterprise to understand the significance of BI, but once BI was adopted, the learning curve proved short, and now that enterprises have seen the light, they want more. The enterprise does not only want the ability to look back; it wants the ability to look forward.

As VNI CEO and President Phil Fraher tells me, it was only a matter of time. Companies have been busy deploying BI and installing data warehouses, and now that the hardware and the massive amounts of memory are all cheaper, they are taking it to the next level.

"The type of modeling that a Cray did 20 years ago for a few companies, slowly but surely, a broader market can now do this kind of number crunching," Fraher says.

For example, companies use forecasting for predicting inventory demand, building customized analytical applications. In financial services, forecasting can optimize portfolios for higher performance.

Does that mean we will see day traders using this stuff? Probably not, but we will see the typical day-trader apps have this kind of stuff embedded inside.

InfoWorld Contributing Editor Jeff Angus tells me that up until now companies that tapped BA from SAS and SPSS have been few and far between. In fact, most companies don't have enough trained analysts, nor are they willing to make the financial commitment in terms of applications and analysts to deploy BA, he says.

My guess is that Business Objects and SAP were driven by customers who want more from BI.

The opportunity was unmistakable, and I suppose at least SPSS, if not SAS, saw the handwriting on the wall and decided to come down from its Olympian heights and partner with Business Objects.

VNI's Fraher also sees the opportunity and has been planning for this day for a long time, moving VNI's libraries from Fortran to C and has now made libraries available for Java and C# developers.

Ultimately, Angus believes, companies using BI will get a taste of BA and will want even more, which will lead them all the way back to SPSS and SAS.

This is certainly one possible outcome. On the other hand, if we follow the traditional path of technology development, BA will spread, starting with the few and going to the many.

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