For the third year in a row, business intelligence (BI) applications have been ranked the top technology priority in the 2008 Gartner Executive Programs survey of 1,500 chief information officers (CIOs).
According to Gartner, this is because CIOs know they must implement a BI strategy properly if they want to accomplish many other priorities, such as customer service improvement and legacy application modernisation.
Speaking ahead of the Gartner Business Intelligence & Information Management Summit in Sydney on March 18-19, 2008, the research firm said the market for BI software would remain healthy but is facing radical change as acquisitions, new delivery models like software-as-a-service and emerging social software tools are accelerating innovation in the sector.
Revenue for BI software vendors in Australia is expected to hit A$184 million in 2008 and reach A$251.5 million in 2011, with a five-year compound annual growth rate (CAGR) of 12.4 per cent.
The overall growth rate forecast for the Asia Pacific region over the same period is 15.5 per cent.
"Greenfield" opportunities, together with fast economic and structural developments, are fuelling higher double-digit growth in other Asia Pacific countries.
However, worldwide growth rates are slowing, and will move into single-digits beyond US$7 billion by 2011, with a five-year compound annual growth rate (CAGR) of 8.6 per cent.
Gartner senior research analyst and presenter at the Gartner BI Summit. Bhavish Sood, said the days of strong double-digit growth in the global business intelligence market are over, as the industry enters a state of flux following vendor consolidation, increasing maturity and price erosion.
"However, BI remains critical for businesses as it turns information into an asset for insight and decision making, especially in high-growth markets in Asia," he said.
Another factor on the market is vendor domination as acquisitions continue to impact customer decision-making. The acquisitions of Hyperion by Oracle and Business Objects by SAP, as well as Cognos by IBM in 2007, disrupted the market.
Overall, more than two-thirds of the current BI market is now attributed to the mega-vendors. The remaining BI powerhouse vendors SAS, Microstrategy, Information Builders, as well as smaller BI vendors, such as Arcplan, Panorama, or Qliktech, will need to increase market push to stay visible above the increased noise from the 'big four.'
According to Gartner, value to users can also increase as a result of mergers and acquisitions in the market.
"Consolidation activities by SAP, Oracle, IBM and Microsoft should help accelerate the value derived from BI," Sood said.
"Large vendors will drive increased usage, while new BI vendors will emerge introducing innovative technology and products to demonstrate differentiation and fill the gaps in the mega-vendors product lines."
Gartner advises end users of BI solutions from vendors that have been recently acquired to hold strategic investments until a product roadmap has been clearly presented from the vendor.