“BI Appliances” are Entering the Fray

By David Hatch, Guest Author

In May of 2007, Cognos announced the availability of “Cognos Now!”, a “BI Appliance”/SaaS BI offering that comes via the acquisition of Celequest this past January. In June, Ingres (an open source database provider) announced the completion of work on a “BI Appliance” with JasperSoft (a provider of open source BI software and services). The recent activity points to an emergence of “BI Appliances” that are designed to decrease the reliance on IT for the deployment of BI solutions. The term “appliance” is being defined in two different ways. The Cognos Now! appliance offering delivers a combination of both hardware and software (database and BI applications), while the Ingres/JasperSoft appliance is a virtual appliance/software-only offering comprised of an operating system, database and BI software platform delivered as a virtual image install.

While “Reporting and Analytics” remains as the #1 technology spend planned for 2007 (according to Aberdeen Group research), On-Demand solutions, which could ostensibly include BI appliances, are emerging as a top contender. The promise of rapid implementations and reduced up front expenditure is so tempting that 47% of companies believe they will utilize On-Demand solutions in 2007. In fact, 32% of companies surveyed for the 2007 Aberdeen Report identify On-Demand solutions as one of their top two planned technology investments.

Many On-Demand solutions are offered by smaller software vendors and providers that are nipping at the heels of giants such as SAP, Microsoft, and Oracle whose offerings in the past had been exemplified by formidable installs and big ticket licenses. The BI market’s established vendors, such as Business Objects, Cognos, Oracle/Hyperion and SAS are introducing On-Demand options, while smaller providers like SeaTab, Oco, LucidEra, Dimensional Insight, and OnDemandIQ are offering BI as a complete On-Demand solution. The On-Demand emergence within the Business Intelligence (BI) market is being driven by a convergence of customer needs and market dynamics:

• The large enterprise BI market is maturing and reaching saturation, forcing the established BI vendors to seek new opportunities with mid-tier and smaller organizations
• Smaller organizations do not typically have the IT resources and BI skill sets necessary to implement and deploy robust BI solutions, but are now experiencing increased demand based on growing data volume and complexity
• Several pure-play On-Demand BI vendors are emerging with offerings that promise low TCO and rapid implementations with robust capabilities
• Large established BI vendors are beginning to offer On-Demand versions of their basic BI components and in some cases, plan to offer their entire enterprise BI suite as an On-Demand solution
• The increasing speed, power and availability of On-Demand solutions is narrowing the performance gap between on and off-premise application implementations

Impact on End Users and Solution Providers Alike

For end users, the integration between databases/warehouses and On-Demand BI products will offer new appliance deployment options. Yet it remains to be seen what advantages this will have over capabilities of integration between two or three separate products. Customers must also consider the openness to multiple data sources as most organizations have multiple disparate source systems feeding their BI and performance management applications.

For other BI and database/warehouse solution providers in this realm, the announcements represent a potential threat to market share and down-market growth to small and mid-tier markets. On-Demand BI interest is beginning to peak, and the recent moves by Cognos, Ingres and JasperSoft are in alignment with this finding. The establishment of On-Demand offerings from large BI software vendors, such as Business Objects, Cognos, Oracle/Hyperion, and SAS along with the emergence of new pure-play On-Demand vendors, such as LucidEra, Oco, OnDemandIQ, and SeaTab, suggests that the market as a whole is viewing On-Demand offerings as a must-have.