Big IT vendors have always pursued the enterprise market, for obvious reasons. A typical corporation offers tens of thousands of users, a high possibility of proprietary lock-in, and an IT budget bigger than a small nation’s GDP.
Now there are signs that some of those mega-vendors are aiming to make business intelligence their next big tool for conquering the enterprise—and to do so, they’re buying up smaller firms that have spent considerable time perfecting B.I. products.
According to Charles King, principal analyst of Pund-IT, IBM’s recent Vivisimo purchase is just the latest in an industry-wide series of acquisitions designed to give the biggest players—including Hewlett-Packard and Oracle—a new market: integrating B.I. tools across the entirety of an enterprise’s operations, instead of mining a very specific type of data or process.
IBM described the Vivisimo acquisition as furthering its efforts to “automate the flow of data into business analytics applications, helping clients better understand consumer behavior, manage customer churn and network performance.” King sees the buy as a way for IBM to speed up its analytics initiatives, strengthening its other tools for working with data across the enterprise.
That deep integration could prove a revenue boon for any company that manages to carry it off. A company that uses a very specific B.I. tool to analyze a narrow range of data (shipping orders, for instance) could switch software vendors fairly quickly, provided their data could be extracted in a relatively streamlined way. But a vendor whose offerings are deeply baked into every aspect of a company’s data and decision-making process would be considerably more difficult to dislodge.
However, vendors aspiring to that role also confront two difficult issues: first, the enormous amounts of data flooding every part of the typical enterprise, and second, the need for quality software to analyze all that aforementioned information.
“Consider how data is created in an average enterprise by tens or hundreds of thousands of workers and machines, and thousands of executives, managers and work groups in scores or hundreds of locations,” King wrote in a May 9 research note. “That anarchic process seriously complicates Big Data solutions’ primary goal of helping organizations gain significant value from their data assets.”
In order to achieve that value, B.I. software needs to lend “coherence” to giant, messy piles of data. “In essence, masses of company data are put through a meat grinder of unmonitored storage in the course of doing business,” King added. “Big Data solutions are designed to take those tons of digital hamburger and reassemble it into whole chunks of meat.” The quality of the B.I. software will determine whether the result is “a tough chuck steak or a tender filet mignon.”
Anyone else suddenly feeling a lot hungrier?
King believes that Oracle’s purchase of Endeca and HP’s Autonomy acquisition will likewise help those companies make broad plays for the enterprise market. Both those acquired properties had significant reputations heading into the buy; moreover, they spared their respective acquirers the considerable time needed to either build a quality B.I. software suite from scratch or stitch together a Frankenstein’s Monster-style offering from bits of existing-but-unrelated properties.
But if the big companies like IBM and HP are making broad B.I. plays, that poses a tough question to the smaller vendors out there, particularly the ones whose products focus on a very specific aspect of enterprise data. Do those tiny firms pray for a buyout from a big firm? Do they plow forward, hoping against hope that they can compete for the same clients? Or do they narrow their market focus to SMBs, an arena in which the startups and small vendors already play with significant success?