The recent years of double-digit increases in business intelligence (BI) spending are coming to an abrupt halt, predicts analyst group Gartner. It argues that investment in BI is being sharply curtailed as a swingeing round of consolidation in the sector has heralded uncertainty.

Gartner suggests that, although worldwide BI spending rose 12.5% in 2007, growth is slowing year on year. That slowdown is likely to persist, with the compound annual growth rate averaging 8.6% over the next five years.

That slowdown is an understandably cautious response to the changes in the market, now dominated by Microsoft, IBM, Oracle and SAP, notes Gartner analyst Dan Sommer. It places question marks over the future of those BI vendors that remain independent – who must now differentiate themselves by delivering innovation in the gaps in product lines of these ‘mega-vendors’. Consolidation is also introducing a degree of uncertainty in the mega-vendors’ roadmaps.

In the long term, consolidation should “help accelerate the value derived from BI”, says Sommer. “Large vendors will drive increased usage,” he says, but new BI software companies will continue to emerge, plugging demand for ever more innovative analytical technologies.

Further reading

Information Builders unfazed by BI feeding frenzy Innovation still drives the independent BI market, says CEO Gerry Cohen

Cognos falls for IBM’s brand of independence Cognos says IBM purchase allows it to remain independent

Business intelligence market consolidation SAP buys Business Objects; Cognos buys Applix

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