BI Scorecard Blog

What’s in a Story (and a Name)?

By Cindi Howson, BI Scorecard

Story telling capabilities are fast becoming table stakes in visual data discovery tools, but not all stories and storyboards are the same. Here's a look a look at four vendors' approaches.

It would be nice to think that most data analyses end with a value added decision or action. But really, many BI analyses end with a Power Point, finely tuned for board room presentations. Data is explored, analyzed, filtered, transformed, and then exported into a story telling medium where it becomes static. The PowerPoint may be used to support or refute a hypothesis or to provide a status update.

But what if that same data could remain within the BI tool, with board room presentation quality? Could those meetings of death by PowerPoint become more effective, interactive work sessions? Can the data be better presented not only to support a hypothesis, but also, to guide a decision-maker to a logical conclusion that compels action? This is the vision behind recent innovations in a number of visual data discovery tools. Tableau and Qlik call them story points and storytelling, respectively, SAP calls it storyboards and infographics. SAS, meanwhile, brings live integration within Power Point itself. While each vendor's feature has slightly similar names, the capabilities differ greatly.

Tableau: Story Points

Tableau released the concept of Story Points in version 8.2 in June this year. With a story, a user can insert a visualization onto a canvas, with the saved filters. The idea of story points is to provide users with the ability to present the data as a story, with a beginning, middle, and end. The banner of the canvas can include a long-text that is clickable. For example, in the below story, "Profits are increasing" is a clickable title. Multiple visualizations can be linked together to create a PowerPoint-like slide show. Within each page, users can adjust the filters. "The data tells you what's happening, but the story guides you to an understanding of why," Tableau says in its white paper, "Data Storytelling."

Qlik: Story Telling

Qlik Sense Desktop was released in July 2014 as a free, desktop visual discovery tool based on the vendor's next-generation interface. The vendor has not announced release data for Qlik Sense for the enterprise, currently in beta. In Qlik Sense Desktop, dashboards and individual visualization can be added to a story. Compared to Tableau, Qlik Sense has a few more bells and whistles to its stories. First, each page of the story can contain multiple visualizations and/or snapshotted images, with the drill point and filters saved. Also, there is an "effect" option that automatically recolors a chart so top (or bottom) performers stand out (in the below image, higher salaries are highlighted). Additional text can be added to the story, whether a simple annotation or a full paragraph. Images and shapes can also be added to the canvas to create a type of infographic. In play mode, each slide nicely transitions to the next. Dashboards remain interactive.

SAP Lumira: Storyboards and Infographics

Earlier this year, SAP added the concept of storyboards to Lumira. While the name may suggest similar capabilities to Tableau and Qlik story telling, in SAP, storyboards are better described as dashboards with multiple visualizations on a single page. Up until that release, Lumira lacked the ability to create these simple dashboards, a capability in most other visual data discovery tools. In addition to visualizations and filters, Lumira storyboards also support text boxes for titles or paragraphs, and images.

Meanwhile, in version 16, released in June this year, SAP added infographics— the ability to add pictograms and shapes to the storyboards. As shown below, there is also a preview ability to see how the infographic will appear on various devices. With infographics, users can also set the color options for the images, background, and some charts. This, of course, should be an expected feature in any BI tool but was lacking in earlier Lumira releases. The infographic capability is an interesting concept, but I found the capabilities too immature to replace PowerPoint. For example, in trying to add a callout, the callout does not natively support text; the text has to be added in a separate text box. As well, the callout pointer cannot be repositioned to connect to the particular image or outlier within the chart.

SAS Visual Analytics: Power Point

The SAS Add-In for Microsoft Office is a little-known but powerful add-in that lets users access and interact with BI content directly from within Excel, Outlook, and PowerPoint. With this approach, users create a visualization within SAS Visual Analytics. Then within PowerPoint, there is a Visual Analytics toolbar that lets them insert the visualization onto the PowerPoint canvas. The visualization is a direct query, not a static export, so it can be refreshed. Users have all the PowerPoint abilities to add text and additional images.

Stories: More to come?

While each of these innovations goes by a similar sounding name, the capabilities differ. All reflect a growing trend of how to better present data, findings, and inflection points into a cohesive story. I suspect story capabilities will continue to emerge in other visual data discovery tools. Like any first novel, I suspect the second releases of these stories will only improving over time.

 

Definitions

Dashboards: multiple visual indicators on a single page

Infographic: visual representation of information, used beyond quantitative data such as in subway maps, weather patterns, and so on

Story: collection of thoughts with a beginning, middle and end

SAS Lays Out Vision for Visual Analytics, Big Data, and Cloud

By Cindi Howson, BI Scorecard

SAS laid out its plans for visual analytics, big data and cloud at its annual analyst summit last week in Steamboat, Colorado. SAS has come a long way since it first set its sights on the BI market back in 2004. With Visual Analytics, the company now has a visually appealing product that combines ease of use with SAS' mathematical brain power.

Visual Analytics (VA) was first released last March, leveraging in-memory processing with a new visual interface. It has since had two subsequent releases to boost the product's flexibility, dashboard design, and Android support.

CEO and Founder Dr. Goodnight demonstrated the next release of Visual Analytics 6.2, due mid year. Its forecasting abilities are a clear differentiator. A few visual data discovery products will do a simple forecasting based on a moving average or linear regression, but Visual Analytics supports six different forecasting algorithms including Holt-Winters method to account for seasonality. The 6.2 release will also allow users to specify which variables to use in the forecast, as well as simulation. For example, if an analyst is trying to forecast utility costs, they may weight variables such as demand, gas prices, and temperature in the model. Allowing a user to easily specify different gas prices, for example, is as one product manager described, "what-if analysis on steroids." CMO Jim Davis emphasized that the advanced analytics capabilities in the product will continue to be a differentiator. A preview of a new decision tree capability again showed the combination of ease, beauty, and analytic power.

SAS is clearly playing to its analytic strengths in the visual data discovery market, but its BI positioning and understanding of that segment seem less clear.

SAS' current BI product, the Enterprise BI (EBI) platform is a separate architecture, interface, and set of capabilities. SAS' revenues in this segment grew only 3.2% in 2013, in contrast to most BI vendors' double-digit growth rates. SAS envisions that Visual Analytics will one day supplant the capabilities in its EBI platform, but it offered no roadmap for how to transition customers or when customers would need only VA. Currently, if a user wants to access data in the data warehouse or relational data store, they would use Web Report Studio (the business query module of EBI). VA Explorer and Designer may offer a more modern and appealing interface, but only when data has been loaded into memory on the SAS LASR Server. SAS has sometimes downplayed the importance of reporting and sometimes relegates BI to only reporting. I have often said though, that there is little point in predicting the future if decision makers don't know what's happening right now or even last week. In the advanced analytics space, SAS grew a healthy 8.8% and many of its solutions, that leverage VA and the advanced analytics, grew in double digits.

SAS also elaborated on its plans in the other industry hot topics of big data, cloud, and mobile. The SAS LASR Server is the underlying platform for Visual Analytics, using in-memory processing and the Hadoop Distributed File System (HDFS). SAS claims that its ability to process models in parallel across multiple nodes is a differentiator. It has a strategy to run alongside analytic appliances such as Teradata and EMC Greenplum, a smart strategy in my opinion and in contrast to some competitors who suggest the data warehouse and analytic appliances are dead. With this architecture, the data does not need to be moved out of the database, but Hadoop is still used for the mathematical processing. While SAS would like also to support SAP Hana, the engineering teams have not collaborated, not surprising as SAP has launched its own efforts in the advanced analytics space with SAP Predictive Analysis. While the customer portion of the summit was under non disclosure, an early adopter of SAS High Performance Analytics said the platform allowed them to bring in more unstructured data into their models, significantly reducing the model's misclassification rate.

For cloud, SAS laid out plans to support the gamut of private cloud, public cloud for platform as a service, and software as a service for certain solutions and products throughout 2013. CTO Keith Collins demonstrated the concept of vApps (virtual apps) where in a few short clicks, an administrator can deploy a fully configured instance of a SAS product, such as Visual Analytics, either on an on-premise virtual machine or in the Amazon Cloud. While SAS has a long history of offering its customers hosted solutions, this is the first that SAS is committing to public cloud deployments. As a baby first step, Visual Analytics free trial version is hosted in the Amazon cloud.

SAS' Mobile story was shorter on details. While the use of the iPad was demonstrated in a number of keynotes, currently iPad and Android is supported only for Visual Analytics and certain pre-built solutions. The EBI platform and Web Report Studio content is not supported directly by SAS, but instead, through a technology partnership with Roambi. The vendor currently takes a native app approach, the right approach (for now) in my opinion. When asking Dr. Goodnight about his plans for an HTML5 version, he said they are watching the market closely but noted that Facebook tried for three years to develop an HTML5-only app and gave up. The current mobile app is good but not great, lacking some of the native gestures (annotate, pinch to zoom, sort) that competitors such as MicroStrategy and SAP have, as well as Roambi.

An always refreshing part of the SAS analyst summit is how candid this privately-held company is about its performance, its views, and its vision. Try to pin down a public company on how much BI revenues grew in 2013, and the answers range from evasive to inflated earnings that include consulting services. Public companies are only clear when it's clearly good news. Dr. Goodnight and Jim Davis seemed nonplussed about the less than stellar performance in the BI segment, suggesting maybe some of the deals gave less credit to BI and more to Customer Analytics. Oh, to be privately held, only to be beholden to customers, rather than shareholders! No wonder the likes of Dell and Heinz are changing tact.

SAS Wants To Be the Best in BI … Really?

Dr. Jim Goodnight, CEO and founder of SAS, says, “I want my BI to be better than anyone else’s.”

After a full day of sessions in which SAS seemed to pay lip service to BI, Goodnight’s comment during a one-on-one briefing reassured me that this quiet vendor is still intent on carving its path in the BI space. The company recognizes BI’s importance. They just don’t like to talk about it much, and it’s clearly the higher end analytics that most excites the company.

In the first day of SAS annual analyst summit in Steamboat Springs, VP of Americas Carl Farrell claimed that BI was a commodity. It’s a comment Chief Marketing Officer Jim Davis made a few years ago, one that I strongly disagree with and previously responded to here. Both Goodnight and Davis explained to me that the issue of what is commoditized has more to do with their definition of BI and of and analytics. SAS defines BI as query and reporting. I define it more broadly to also include OLAP, dashboards, visual discovery, Microsoft Office integration, and predictive analytics (see the free BI Scorecard® BI Market segments report for more detail).  Even in the business query space, more powerful and appealing products command a premium price. Capabilities such as multiple star schema queries or merging data with personal data sources are standard fair in leading BI tools, but not in SAS Web Report Studio (yet). What’s free is not the most widely used. So I’d still disagree with SAS that even this particular BI module is nearing commoditization.

Of course, any vendor who has a greater emphasis on the higher end of the BI spectrum has reason to downplay the bread and butter aspects of BI. Being late to the core BI market could also be another reason to downplay its importance. Of SAS’s $2.43 billion in revenues, only 11% to 16% (depending on what gets counted) comes from core BI;  SAS’’s core BI revenues grew 22% last year.  A larger portion of SAS revenues comes from its high- end analytics (another confusing term that I elaborate on here) and its industry solutions, which certainly command higher prices and margins.

I argued that core BI is important, because predicting the future is irrelevant if a company doesn’t even know what is going on right now. Too many businesses struggle with “How much inventory do we have on hand? Can we fill an order from another warehouse?”  Davis countered, “we want to tell you more than which warehouse has inventory;  we want to recommend the best warehouse to source from, and at the optimal price.” Well, yes, that would be nice, but I’m willing to start with the basics.

As an example of SAS being quiet on the BI front, the vendor released 4.3 in Q4 2010. It may not have been a major product release, but it did include significant improvements to the dashboard capabilities, improving ease of use and leveraging Flash. Most media and customers were unaware of it. As well, SAS recently unbundled its Add-In for Microsoft Office (AMO) from the BI Server for SMBs to deploy stand-alone, branding the solution Office Analytics.  In scoring BI Office Add-Ins from leading vendors, BI Scorecard rates SAS’ capabilities the best. In the past, users could only get AMO when they bought the whole BI server. So this unbundling is great news for customers, but again, there was no buzz from the company.

Looking ahead, SAS plans to release a new version of its BI suite in fall 2011. The company has reorganized over 300 developers to dramatically improve the user interface, a move that affects not only the BI suite, but also the presentation layer of its industry analytic applications (SAS Solutions).  SAS is increasingly leveraging Flash and is also looking at how to design once and render anywhere as it moves to support BI anywhere (desktop, browser, tablet, smartphone)  and in any interface (dashboard, visual exploration, query, or Office). 

Also announced this week is a partnership with specialty mobile BI vendor RoamBI.  As I’ve written about this vendor in the 2011 predictions and in my Cool BI classes, RoamBI takes a unique approach to mobile BI in that they are BI vendor agnostic for the iPad and iPhone.  They leverage existing report definitions and security for Microsoft, SAP BusinessObjects, and now SAS. SAS did not, however, elaborate on its plans for mobile on other devices, except to acknowledge they will support 20 to 30 devices.

Dr. Goodnight started the summit with the message, that  when customers and analysts think of SAS, he wants them to think Analytics.  I’d say that mission is accomplished. When we think of SAS, do we think of BI? Not yet.

Regards,

Cindi Howson, BI Scorecard

 

 

SAS’ Answer to Pervasive BI: Microsoft Outlook

I was recently at the SAS BI User Connect Conference in which select customers convene at SAS headquarters to share solutions, struggles, and to learn about new product capabilities.

One of the improvements that I was most excited about is a new version of the SAS Add-In for Microsoft Office (AMO) that now has tight integration with Outlook. As an office tool, Email is more widely used than Excel, and SAS appears to be ahead of the market in leveraging Outlook as a way of making BI more pervasive, particularly for casual users. As I discuss in this Ease of Use in BI report, Email is rated significantly easier to use than BI tools, and easier-to-use BI tools boast a 10% higher adoption rate than BI usage overall.

Some BI vendors do support scheduled reports to be sent to Email. SAS, however, takes the integration several steps further. First, the Email client is used as a navigation tool to access all reports and dashboards. Folders on the SAS BI Server automatically appear as folders in Outlook. Then, from within Outlook, users can view, refresh, or send a report to another person. Security is maintained by the SAS BI Server. There is a nifty gadget pane that lets users quickly view their most important business indicators.   The SAS AMO is included as part of the BI Server license.

In comparing SAS’s Email integration with other BI vendors, only SAP’s Duet, released in Q2 2006, seems to come close. That product, however, has had limited adoption with customers citing high licensing costs and transition concerns with BEx. Duet also goes beyond reporting to include transaction capabilities from within Outlook.

Surprizing to me and to SAS customers who attended the event, though, is that this “little”-known enhancement became available in August. SAS says they plan a marketing launch next month. The timing was more that the client-side upgrade shipped last month in which the new Rapid Predictive Modeler got all the attention. SAS customers were unanimous in their enthusiasm for the Outlook integration.

What do you think? If your BI vendor had direct access to the BI Server from Outlook, how would that affect your BI adoption? Who’s using SAP’s Duet?

For a sneak peak of SAS’ enhancement and other cool innovations in BI, catch my next Cool BI course at TDWI in Orlando.

 Regards,

Cindi Howson, BI Scorecard

 

 

 

 

SAS and Mainstream Analytics

In another move reflecting the shift to “mainstream analytics” – the predictive kind – SAS just announced the release of SAS Rapid Predictive Modeler. The product became generally available mid August.

The product allows less sophisticated users to create a basic model from within an Excel interface.  SAS has added Rapid Predictive Modeler (RPM) as a task within the SAS Add-in for Microsoft Office.  The SAS Office Add-In is one of the best on the market (see this blog and report) in its breadth of data access, but also, because it more often keeps the data on the server versus pulling everything into the spreadsheet. The Add-In also had a number of features that complement RPM, including the ability to create a sample data set, generate descriptive statistics, and to score a model. With RPM, a user can choose to create a basic, intermediate, or advanced model. A statistician can further tweak the model in any of the other SAS interfaces such as Enterprise Guide or Enterprise Miner. The first release of SAS Rapid Predictive Modeler supports only classification and regression models.

Of course the risk with RPM, as with any attempt to simplify analytics for non statisticians is that untrained users misapply the tool or misinterpret the results. However, anything that facilitates the dialogue between the business users (who know which variables are more likely to influence an outcome) with the statisticians (who know how to build the models) can only be a good thing.

Regards

Cindi Howson, BI Scorecard

SAS - Confident in Steamboat

I’m just back from the SAS 19^th annual analyst summit in Steamboat Springs, Colorado. It sounds like a boondoggle, doesn’t it? But as it’s the week after TDWI, with my daughter’s birthday in between, for me it’s one heck of a long business trip with no time for skiing. Missing my daughter’s birthday is not an option.

Beyond even the BI world, SAS is an inspiring company. With revenues just over $2.3 billion, it is the largest privately held software company. Its founder, Dr. Jim Goodnight is visionary in the way he treats his employees. Fortune just awarded SAS THE best company to work for. Amid a severe recession, SAS has had no layoffs. With outsourcing the norm, SAS keeps everyone from grounds people to cafeteria workers to advertising executives directly on their payroll. Then there is the on-site day care, medical care, school, gym and more at its headquarters in Cary, NC. Dr. Goodnight’s view is that if you treat employees well, they will be happier and more focused on the customer and delivering value to them. Even their subscription-based pricing model was ahead of its time, before SaaS made such pricing standard.

In the BI world, SAS is the leader in advanced analytics, but it is in a crowded second tier for BI. When I came to this event two years ago, I felt SAS was somewhat dismissive of core BI. The basics of BI – query, reporting, OLAP, dashboards-- seemed beneath them. This year, SAS did a better job of acknowledging that there are different BI requirements, with varying levels of analytic complexity and sophistication.

With IBM having acquired SPSS, SAS’s closest (but distant) competitor in advanced analytics, I thought there would be more attention on how this acquisition will affect SAS’s strategy and market dynamics. And yet, it sounded almost like a nonevent. VP and Chief Marketing Officer Jim Davis, said “IBM has a tool box that lets them sell services. We have solutions.” Indeed, the solutions account for more than a third of SAS’ revenues.  With the exception of Oracle, most of SAS’ competitors don’t have a strong portfolio of analytic applications; it’s a fragmented market dominated largely by niche providers.

SAS previewed some exciting  enhancements to its core BI capabilities and to its predictive modeling tools, but as analyst Merv Adrian aptly tweeted, “the dreaded NDA has reared its ugly head.” So I have to hold off writing about that until nearer the product releases. I have to say, while the tweeting and integration of tweet comments at the analyst summit (see #sassb) was probably one of the best this year, it reinforces that vendors need to have much clearer, timelier NDA guidelines. People were tweeting about non announced stuff.  As you’ve read here before, I err on the side of caution.

With SAS being so forward thinking about its employees and even its pricing models, there was one thing that left me puzzled. Of all the executive and even customer presentations, there was not a single female speaker. I’m not a quota person, but with females accounting for a third of the BI workforce, it was noticeable, at least to me.

As I headed back to the airport with blue skies and breathtaking views of the mountains, I lamented that I hadn’t made time for skiing. I texted my husband, wondering if there would still be snow in Vermont at the end of March, a quick weekend getaway. I’ll let you know if we make it!

Sincerely,

Cindi Howson, BI Scoreca 

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