Tough macroeconomic conditions and confusion related to emerging technology terms led to more muted growth in the worldwide business intelligence (BI), corporate performance management (CPM) and analytics applications, and performance management software market than in previous years, according to IT research firm Gartner.
Overall revenue for this market sector totaled $13.1 billion in 2012, a 6.8 percent increase from $12.3 billion in 2011. SAP held the lead, with just under $3 billion in revenue in this segment, for a 22.5 percent market share, though the company's revenue in this market grew less than 1 percent. The top five vendors together accounted for 70 percent of the total BI software market revenue.
"After a few historic banner years of spend in the BI software market, which culminated in more than 17 percent growth in 2011, growth was more subdued in 2012, at 7 percent," Dan Sommer, principal research analyst at Gartner, said in a statement. "While this seems like a dramatic drop, it was in line with our forecasts published during 2012."
In second place was Oracle, with revenue in this market of $1.9 billion in this market, for a share just under 15 percent, and revenue growth of 2 percent from 2011 to 2012. While each of the top five BI software vendors retained their top five status, IBM and SAS exchanged places to move IBM into third position and SAS into fourth. Big Blue posted revenue in this market of a little more than $1.6 billion, good enough for 12.4 percent of the market, and the company’s BI, CPM and analytics software growth was an impressive 9.9 percent.
SAS revenue in this market grew 3.7 percent in 2012, to give it a 12.2 percent stake, or just under $1.6 billion, while fifth-place Microsoft enjoyed the highest growth of the top five vendors in 2012, with revenue in this sector rising by 12.2 percent from 2011, to $1.2 billion. Other unnamed vendors, combined, represented 29 percent of the total market and $3.8 billion in revenue in 2012, up from the $3.4 billion in 2011.
"The business intelligence space managed to grow by a reasonable 7 percent in 2012, despite difficult macro-conditions, being on the tail end of a spending cycle and confusion related to emerging technology terms causing a hold on purse strings," Sommer continued. "On the positive side, data discovery became a mainstream architecture in 2012 and the vendors built on this paradigm gained market share, while most semantically layered BI platforms grew in the single digits, at best. Cloud-based buying is also starting to make an imprint on the radar, showing substantial growth, although cloud still accounts for a smaller portion of the BI market, compared with other application markets."
Gartner identified five market dynamics that affected BI software spend and growth in 2012. The first two, challenging macronomics and term confusion about "analytics," "big data" and "BI" had a negative impact on market growth, while the third, which involved BI spending moving outside of IT, had a neutral effect. However, the fourth and fifth dynamics—data discovery becoming a mainstream architecture and software as a service (SaaS) increasingly becoming the preferred option for granular analytics—were drivers of market growth, according to the report.