Market data

The business intelligence (BI) market in 2005 is as robust and healthy as it has ever been, with the sector's growth easily outstripping the average across the software industry. Analyst house Forrester Research expects the sector to show growth of over 7% in 2005, quickening to 8.5% in 2006 before the pace cools to around 5% towards the end of the decade.

The strongest growth will be in BI services. While software sales will still account for the largest part of the market, demand for BI services will rise by around 12% in both 2005 and 2006, says Forrester.

As a whole, revenues for BI software, services and maintenance totalled $5.6 billion in 2004, up from $5.3 billion in the previous year. By 2008, it is forecast to rise to $7.3 billion.

One of the underlying trends within the market will be the increased use of BI within core business applications. Demand for such ’embedded' software, provided by companies such as SAP, Siebel and Oracle as an adjunct to their business applications, has risen sharply in recent years, from a mere $28.2 million in 2000 to a predicted $141.0 million in 2005, according to industry advisor Gartner. Over the next three years, sales of embedded BI software will rise by an average of 22% to reach $203.3 million in 2007, accounting for 26% of all BI software revenues, Gartner reports.

Reflecting that, the business applications vendors are now showing up on the market share charts.

Even after large-scale consolidation at the top of the BI market (the acquisitions of Brio by Hyperion Solutions and Crystal Decisions by Business Objects) the fight at the top of the BI software sector for query, analysis, reporting and analytical applications still involves a large group of combatants – Business Objects, SAS, Cognos, MicroStrategy, Hyperion, SAP, Oracle, Microsoft and Information Builders.

But under the broadest use of the term BI, there are plenty of sub-markets. In 2003, the business or corporate performance management software market, where Hyperion Software and Cognos are strong, was worth $520 million. By 2009 Gartner expects it to generate over $900 million, growing at an average rate of around 9% Another segment of BI, the online analytical processing (OLAP) software market, has re-bounded to its highest level since the technology's glory days in 2000. During 2004, the OLAP market grew 15.7% to $4.3 billion. Three companies continue to dominate the OLAP software market. Microsoft, with its Analysis Services product, now holds 27.4% of the market, according to the OLAP Report, while the market's original pioneer, Hyperion, holds a 20.7% share and Cognos commands 14.1%.

Meanwhile, surveys show that there will be no let up in demand for BI products during 2005. Recent interviews with 538 North American and European businesses conducted by Forrester, showed one-third predicting they will buy BI software or services during the year. Of those, 38% are budgeting for higher BI expenditure than in 2004 with just under half saying they will maintain spending at 2004 levels.


Standalone vs embedded BI software sales ($m)
Source: Gartner


Business intelligence market growth ($m)
Source: Forrester


Data integration spending
Source: IDC


OLAP software market share
Source: The OLAP Report


BI software market share
Source: Gartner

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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