BI Scorecard Blog

IBM to Acquire SPSS ... and Announces New Analytics System

Yesterday IBM announced its intent to acquire the advanced analytics vendor SPSS for $1.2 billion.

The acquisition fills what had been a void in IBM’s business intelligence capabilities and is a further expansion of its Information on Demand portfolio, with $10 billion in acquisitions over the past several years.

Predictive analytics has been a hot topic for years but one in which there seems to be little consensus on how to bring it from the back room to the front lines.  It’s clear that building good predictive models requires a high degree of expertise and is not something that will become main stream any time soon.  However, incorporating the results of those models into every day decisions that even the most novice of information users can consume and act upon has become the holy grail. So what does that mean – store everything in the database? Execute at run time and surface in a report?

Not surprisingly, SAS has made the most inroads here by both pushing analytics into the database for faster execution and based on larger data volumes, but also, surfacing the results in standard reports in its BI platform.  Of leading BI vendors, Microsoft and MicroStrategy also have good solutions that surface results in either Excel 2007 or a MicroStrategy report, respectively.  (see the BI Scorecard Summary report for more information.)

Interestingly, SAP BusinessObjects began shipping an OEMd version of SPSS last spring. The SAP BusinessObjects Predictive Workbench allows the BusinessObjects universe to act as a data source to Clementine modelers. It will be interesting to see if this agreement remains in place following the acquisition’s close. The challenge of course is that beyond SAS and SPSS, the predictive analytics space is predominantly smaller players.  

Amidst this announcement, IBM says it was purely coincidental timing that many press and analysts were at their R&D offices attending a briefing on their new “Smart Analytics System” (due out in September) and “Smart Analytics Optimizer” (due out in Q4). The Smart Analytics System is more than an appliance, including the hardware, software, and services optimized for a particular BI deployment, or as IBM calls it “analytic workload”, whether predictive or not. IBM guarantees a 50% lower cost of ownership versus the current approach of buying and deploying components a la carte. A lower cost of ownership and faster deployment time is of course appealing. However, it seemed odd to me that the first versions of the systems only include Cognos as an option, not a standard component. Same applies to ETL capabilities. In this regard, while the vision is enticing, I can’t help but remain skeptical customers will continue to have the degree of flexibility they currently have. 

Or has the market gotten to the point that time to value and lower cost of ownership trump flexibility and the desire to mix and match components?

Regards,

Cindi Howson

 

 

 

 

 

BI Goes Green(er)!

While many tout BI as a way of boosting profits, BI is increasingly going green as a way to promote sustainability and good corporate citizenship.

Under full disclosure here, I am thrilled that green is gaining ground! I am green, very green. Admittedly, I was not always so passionate about these topics. However, living in Switzerland for eight years forever changed my view of garbage. Indeed the Swiss have “garbage” police who will check your trash to ensure you are recycling and fine you if you’re not recycling (I wish they’d visit NJ for a week!). As trash bags are expensive ($10 a bag, if I recall correctly), manufacturers package their consumer products frugally. You can buy milk and fabric softener in something like a ziploc bag, which creates less trash than big plastic cartons. For companies who don’t package their goods so wisely, shoppers unwrap things at the supermarket and let the store deal with the unwanted packaging.

There have been glimpses of a few BI vendors going green for several years now. Three years ago, Hyperion began offering employees a $5000 discount to buy fuel-efficient cars. While Oracle did not continue that program post acquisition, it has been recognized for some of its environmental efforts.

This past fall, at the Business Objects user conference, citing its vision to raise awareness of green issues, the vendor distributed refillable water bottles to attendees instead of the disposable ones usually provided during conference breaks.

(What a novel idea! I so much liked this idea that it inspired me to give family members these cool SIGG water bottles for Christmas, complete with an explanation of how we toss 38 billion empty bottles in the trash each year, not to mention the 462 million gallons of oil to ship the bottles).

That some BI vendors are trying to be good corporate citizens is one way to measure a vendor’s greenness. However, an emerging and more profound aspect is in how BI software can be used to implement and monitor sustainability efforts.

Prima Consulting in Australia is one of the first BI companies I’ve stumbled across to offer an ERP-agnostic scorecard to help customers manage their CO₂ emissions. Their solution, Sustainability SCO₂RECARD was released late last year and is built on Microsoft PerformancePoint and Microsoft BI. They initially developed the application to help Australian companies meet legislative requirements to reduce green house gas emissions, but customers are finding that reducing energy costs and eliminating waste can also improve profitability.

This week, SAS announced a new application, SAS for Sustainability Management. It uses the BI platform and performance management applications to provide companies with a way of measuring sustainability goals and performance against them. Leveraging the vendor’s predictive analytic capabilities, customers can also model changes in energy consumption or emissions to see how it affects sustainability goals. As a green BI vendor, SAS has been considering building a solar energy farms at its headquarters.

The green influence on BI is still in its early days with most of the activity seemingly focused on reducing data center energy consumption. As you partner with a BI vendor, consider how good a corporate citizen they are and whether they are providing solutions to help you with your company’s own efforts to go green.

As a way of raising everyone's awareness on the facets of green BI, I also encourage vendors to list their green policies and BI applications here.

Regards,

Cindi

Founder, BIScorecard, a web-site for in-depth BI product reviews

Author: Successful Business Intelligence: Secrets to Making BI a Killer App

Is BI a Commodity

I was recently at a SAS event in which Jim Davis, their Chief Marketing Officer, described the commoditization of BI. He described their sales efforts for these applications as low and the price sensitivity as high.

I gasped (silently of course), thinking of the many customers I speak to and work with who spend months evaluating software, sending vendors painfully detailed RFIs, and diligently conducting proof of concepts. Some of these customers already own BI tools or will evaluate tools despite what’s being offered to them for free.

So at first I thought SAS’ comments were in isolation and only relative to their efforts to sell analytic applications (which do command a higher price and take more sales efforts.) But then I saw another reference to commoditization of BI in a CIO magazine. And someone referred to this commoditization as a fact at a seminar I recently taught.

Is my head in the sand here? Or are forces at work to give buyers the wrong impression?

A commodity is anything for which there is supply but without much differentiation. Without a differentiation, vendors are forced to compete mainly on price, putting pressure on margins.

So is that where we are today?

In terms of differentiation, the strategies that several vendors are pursuing are quite similar. Several are pursuing end-to-end BI from ERP to ETL to BI tools, analytic applications, and performance management. Note though, that IBM/Cognos doesn’t compete in the ERP space. SAP/Business Objects doesn’t compete in the RDBMS space. Some vendors such as SAS, MicroStrategy, Information Builders, and Qliktech take a more narrow focus of BI. So there are strategic differences.

In terms of product capabilities for BI tools, on the surface all of the vendors now offer a broad spectrum of solutions that include reporting, business query, OLAP, Office integration, and dashboards. Several years ago, vendors competed in only a single segment of the BI spectrum, so indeed, on the surface, the spectrum of offerings seems similar. But this is where the difference ends. None of the vendors are great at all these modules. Instead, they continue to have their strengths and weaknesses in specific modules. Add emerging capabilities such as BI search, mobile BI, rich reportlets, as well as integration with advanced visualization and predictive analytics and the products differ still more.

Price is a slightly different story. Operating margins have declined somewhat in recent years, but not drastically. Microsoft’s increased presence in the BI market helps drive prices downward. Software heavy weights Oracle, SAP, and IBM may further affect BI pricing as these vendors can more readily bundle BI with bigger ticket items, whether the operational apps or the database, but that’s not yet happening. BI needs to become more affordable for it to become more pervasive. Vendors, however, are not yet competing on price alone as they would with something that has been commoditized. Customers continue to be willing to pay a premium for better or unique product capabilities.

So where is this commoditization perception coming from? Perhaps it’s a prediction for the future. Or perhaps some vendors want you to think BI is commodity so you’ll buy from whoever already has a foothold in your company.

I’d welcome your comments on how important price has been in your BI buying … and how well you think the vendors are articulating their differentiators.

Sincerely,

Cindi Howson, Founder,

BIScorecard, a web-site for in-depth BI product reviews

Author: Successful Business Intelligence: Secrets to Making BI a Killer App