Portals eNewsletters Web Seminars dataWarehouse.com DM Review Magazine
DM Review | Covering Business Intelligence, Integration & Analytics
   Covering Business Intelligence, Integration & Analytics Advanced Search

Resource Portals
Business Intelligence
Business Performance Management
Data Integration
Data Quality
Data Warehousing Basics
More Portals...


Information Center
DM Review Home
Web Seminars & Archives
Current Magazine Issue
Magazine Archives
Online Columnists
Ask the Experts
Industry News
Search DM Review

General Resources
Industry Events Calendar
Vendor Listings
White Paper Library
Software Demo Lab
Monthly Product Guides
Buyer's Guide

General Resources
About Us
Press Releases
Media Kit
Magazine Subscriptions
Editorial Calendar
Contact Us
Customer Service

Analytic Solutions A European Perspective

  Article published in DM Direct Special Report
February 4, 2003 Issue
  By Christina Steensboe

The business intelligence and analytics markets have flourished in past years, and even during the last two years which have been characterized by tough market conditions, the markets showed respectable growth rates. Analytic software is used in many large European organizations today, and the medium- size and to some extent small organizations are following.

In the beginning, business intelligence was focused on establishing more effective ways of delivering information to employees. The analytic solutions were built by specialists and only a few people had access to and used the solutions. Today's analytic solutions have moved beyond merely improving information delivery to focusing on business process improvement guiding users on a recommended series of steps for making a specific type of decision. The Web plays an important part in turning many business people into information consumers and in making the analytic solutions accessible for a large number of people.

The Makeup of the Markets

Large global companies - mostly U.S.-based - dominate the Western European business intelligence and analytics markets. However, two European-based vendors, SAP and Business Objects, are among the market leaders in most countries across Europe, and vendors such as Armstrong-Laing, Cartesis, CODA, Frango, Kalido and MIS AG play important roles in the analytics markets in specific Western European countries.

The players in the European business intelligence and analytics markets come from various backgrounds:

  • Business intelligence tools
  • Databases
  • Enterprise applications
  • Analytic applications

Until just a few years ago there was a clear distinction between vendors who provided build and buy solutions. The business intelligence tools and database vendors offered the "raw materials" - data warehousing tools - for building analytic solutions, and the applications vendors - whether in the enterprise or analytics area - provided buy solutions in the form of packaged analytic applications. Now that many vendors provide both business intelligence tools and analytic applications, the picture is not so clear-cut anymore.

Analytic Solutions Market Size and Outlook

Until 2001, the European markets for analytic solutions showed consistently solid growth rates - in most cases year on year growth was higher than 20 percent. However, 2001 and 2002 proved to be challenging years for most analytics vendors, and the average market growth rates declined sharply - to 5 percent for the data warehousing tools (build) market and 13 percent for the analytic applications (buy) market in 2001. Yet, compared to other areas of the IT and software industry this is still considered respectable growth. However, preliminary numbers for 2002 indicate that the yearly growth rates decreased even further, and the outlook for 2003 looks similar to the expected results for 2002, with the rebound in the analytics markets forecast for the end of 2003 or beginning of 2004. As companies once again put budget money aside for implementing analytics projects to access and analyze data and get a complete view of the business, growth will pick up again.

Some of the factors and market segments that will drive growth in the analytic solution markets in Western Europe over the next years are:

  • Even during the economic downturn, companies are looking for ways to obtaining a better and more current strategic understanding of their core functions. BPM software, including balanced scorecard applications that measure and analyze business performance according to key performance indicators, is one of the solutions that executives turn to. BPM applications provide an opportunity to draw data from information systems throughout the company and turn the data into actionable strategic information.
  • Companies are increasingly considering CRM analytics as a necessary part of - and a way of enhancing - their CRM solution. Many vendors now provide a CRM offering that includes both operations and analytics.
  • Risk management analytics: the ability to manage risk across different industries and business functions is in high demand in volatile business conditions.
  • Increased emphasis on data quality and data integration as crucial elements of successful data warehouse implementations.
  • Increased intranet adoption and supply chain integration bring data warehouse access tools to broader classes of users both within and outside the enterprise. The larger end-user population will come from all levels of the organization; therefore, opportunities for data warehouse access tools exist across all business functions.
  • The requirement for faster implementations of analytic solutions projects will support continued growth for packaged data marts/warehouses and verticalized analytic applications.

Over the next five years, growth is forecast to be slightly stronger for the buy market for analytic solutions - represented by packaged analytic applications - than for the build market - represented by data warehousing tools - as shown in Figure 1.

Figure 1: Western European Analytic Solutions Software Revenues, 2001 and 2006 ($M)

Country Differences: Status and Outlook

When looking at the adoption and usage of analytic software in countries and regions across Western Europe, some clear differences stand out.

The U.K., Germany and France are the early adopter countries for analytic software. German companies have a strong ERP and applications tradition, which also has translated into a major interest in analytic applications. The U.K. market is often the first market that U.S.-based companies enter in Europe, and a large number of U.S. analytics vendors are well established there. France has traditionally been an early adopter country and front runner in Europe when it comes to the usage of business intelligence, which also explains the country's early adopter status for analytic solutions.

Likewise, the presence of strong local vendors has an important impact on the adoption rates for analytic software. Germany, France and the U.K. have significant local players in the business intelligence and analytic applications areas, including Business Objects, Cartesis, SAP, MIS AG, Misys, Armstrong-Laing and Kalido.

Analytic software has also found a good foothold in the Nordic and Benelux regions with many projects being implemented, and there is demand for more advanced solutions.

In Southern Europe, Spain is beginning to see healthy growth in analytic software, whereas Portugal and Greece are still at an earlier stage of adoption of analytic technologies. Some of the larger vendors that have seen an increased interest in business intelligence and analytics in Spain are making serious efforts to penetrate the market, but only few vendors are serving the Portuguese and Greek markets via direct offices.

Growth in analytic solutions revenue is forecast to be healthy in all Western European countries and regions over the next five years, but France, Switzerland, Sweden, the U.K. and Germany are forecast to experience the highest growth.

Guidance for Successful Projects

The following are some of the factors that vendors of analytic software as well as companies embarking on analytic solutions projects should consider to leverage the market opportunities and assure a successful implementation.

  • When implementing analytic solutions to address different business issues, a company should decide on the best strategy for building and buying the solutions. This must be done on a case-by-case basis, and a long list of factors need to be taken into account, including budget, time, available resources, technical expertise found in the company, data sources, ease of use of the solution, etc.
  • Analytics projects should be driven by business needs and have the commercial backing in the organization. Support from all important stakeholders across the organization is needed.
  • A company implementing an analytic solution should be sure to involve all relevant people - internal and external users as well as consultants and IT specialists - to take the reporting needs, business process change issues and technology requirements and challenges into account. The solution should assure consistent reporting but also cater for the diversity of information needs across user groups.
  • One of they key obstacles to successful analytics implementations is organizational and cultural barriers, including insufficient business process change. The organization and people must be prepared to change business processes and work models. This represents an opportunity for strategy and process consulting companies to work side by side with software vendors in reorganizing existing business processes.
  • Vendors should be prepared to present detailed return on investment (ROI) calculations and case studies from previous implementations to prospects. ROI calculations should help provide a realistic assessment of the costs and benefits of the analytics project.
  • Both technology and go-to-market partnerships are becoming increasingly important in the analytic solutions marketplace. Partnerships are key for penetrating the various country markets as well as for offering more complete analytic solutions enabling customer to deal with fewer suppliers.

Definitions: Build Versus Buy

Companies can choose different approaches for acquiring the analytic solutions they need. Solutions can either be built using data warehousing tools or bought as packaged analytic applications. IDC segments the market for analytic solutions into two categories shown in Figure 2.

Figure 2: Definitions of Build and Buy Segments of Analytical Solutions

IDC believes that the current state of the build market is a predictor of the future state of the buy market, as increased demand for a specific type of functionality or technology leads the vendors of analytic software to develop packaged analytic applications that provide such functionality. Many vendors that started out as pure- play business intelligence tools vendors, including Business Objects, SAS and Cognos, have now added packaged analytic applications to their product portfolios. Some of these applications are based on internal development whereas others are the result of acquisitions. The move from business intelligence tools to packaged analytic applications is a natural step for these vendors, as their playing field of the software market is becoming more mature.


For more information on related topics visit the following related portals...
Strategic Intelligence.

Christina Steensboe joined IDC's European Software Group in 1999, and she currently manages the European Business Intelligence and Analytic Applications research service. In this role, Steensboe provides coverage of the business intelligence, analytic applications and data warehousing markets in Western Europe from both the supplier and end-user perspectives. She has published numerous research documents addressing the latest market trends and future directions in the business intelligence and analytics markets across Europe. Additional information on IDC's research and consulting opportunities is available on www.idc.com. You can reach her e-mail csteensboe@idc.com.

Solutions Marketplace
Provided by IndustryBrains

Intuit Track-It! Help Desk Software
Intuit IT Solutions provides Track-It! - the leading help desk software solution for call tracking, problem resolution, remote control, asset management, LAN/PC auditing, network management, and electronic software distribution. Free demo

Way better than backup! - Continuous Protection
Free White Paper. TimeSpring's CDP software for Windows automatically captures all changes in REAL TIME so you can recover from data loss, corruption or security breaches in minutes. Analyze, report and test data anytime without impacting operations.

Help Desk Software Co-Winners HelpSTAR and Remedy
Help Desk Technology's HelpSTAR and BMC Remedy have been declared co-winners in Windows IT Pro Readers' Choice Awards for 2004. Discover proven help desk best practices right out of the box.

See Enterprise Business Intelligence in Action
See how business intelligence can be used to solve real business problems with this live demo from Information Builders

BlueSky Query by Relational Solutions, easy and affordable
Don?t blow your budget on BUSINESS OBJECTS or COGNOS. BlueSky is affordable, easy to use and browser based. Ad hoc querying for analysts. Reports with views for managers. Drag, drop, drill. Clicks change tables to trend, pie or bar charts. Excel/Word integration.

Click here to advertise in this space

E-mail This Article E-Mail This Article
Printer Friendly Version Printer-Friendly Version
Related Content Related Content
Request Reprints Request Reprints
Site Map Terms of Use Privacy Policy
SourceMedia (c) 2005 DM Review and SourceMedia, Inc. All rights reserved.
Use, duplication, or sale of this service, or data contained herein, is strictly prohibited.