From the Editor in Chief

SAN MATEO (07/17/2000) - Given the rapid rise of e-business initiatives, there's no question that the next big wave of activity in this space will be centered on analysis tools of all types and stripes. After all, building a digital exchange to handle transactions is one thing, but understanding the business relationships that make up that exchange is quite another.

The biggest problem people will face as they try to apply data analysis tools to their emerging e-business architectures is the fragmented nature of this entire category. Today this category includes traditional data analysis tools from companies such as SAS Institute Inc. alongside software packages aimed specifically at data mining, report writing, business intelligence, knowledge management, data warehousing, and online analytical processing.

In effect this means that what was once a series of separate but related software categories is about to morph into a single US$20 billion software category that is ripe for mergers and acquisitions.

Driving all the interest in these tools is the need to understand the business processes in real time in order to take quick and decisive action in Internet time. Unfortunately for IT organizations, most of these tools have significant shortcomings in either one or two categories.

The first major issue concerns all the start-up vendors in these categories that came into being thanks to the rise of the Web. Although most of the products these vendors offer are typically fine, they were not built with the scale of today's e-business operations in mind. As such, many of these vendors are in the process of rebuilding their initial offerings around technologies such as Java and XML.

The second category is made up of the traditional enterprise players in this space that have always understood scalability.

Alas, what they don't really understand at this point is the Internet and technologies such as XML. In fact, the vast majority of these vendors have so far Web-enabled only their existing client/server offerings and are racing now to rebuild their existing wares using Internet technologies.

Further complicating this conundrum is the fact that nobody in this space offers a complete solution, which means that IT organizations need to cobble together multiple applications from different vendors to provide a full set of capabilities to their business customers.

Because a capitalist market abhors inefficiencies, it's only a matter of time before the 50-plus companies that make up this space are bought and sold as the dominant players move to develop suites of products that span the entire category. Exactly what this category is going to be called remains to be seen, but right now most folks are leaning toward referring to the entire category as knowledge management.

Initially this will complicate things because people today think of knowledge management as either an oxymoron or as an esoteric software category populated by quasi-artificially intelligent applications.

But when you think about it, knowledge management is really the best name for the whole category. After all, what business people are really after is knowledge.

Getting access to more data is not what people want at all. What they want is a set of tools that make it easy to comprehend e-business trends without having to wait for the IT department to process a report.

So in due time, the next killer application is going to a knowledge management suite that rolls together all the features and functions of these related software categories into an easy-to-use offering that alerts people to events before they have a significant impact on the business.

After all, telling people about something that just happened is useful, but telling them what the impact that event is going to have on their business in the future is truly valuable.

Until this happens, the whole development of this category is likely to be stymied by too many point products and not enough true solutions.

Michael Vizard is editor in chief of InfoWorld.

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