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SAP, Oracle both claim top spot in IDC business analytics study

SAP Summary: SAP and Oracle both claimed market leadership in IDC's 2006 business analytics study but there can only be one No. 1.

Has the business analytics software industry adopted a kinder, gentler attitude where everybody wins -- just like...

in nursery school?

That's almost what it seemed like after SAP and Oracle recently issued press releases, both claiming leadership in Framingham, Mass.-based IDC's research report Worldwide Business Analytics Software 2006-2010 Forecast and 2005 Vendor Shares. The study describes the market for data analysis technologies, which IDC defines as including data warehouse systems, business intelligence (BI) tools and analytics applications. It's a large market that grew at a rate of 11% to $16.5 billon dollars in 2005, according to Dan Vesset, author of the study and research director with IDC. A careful reading of Oracle's and SAP's press releases revealed that both companies' claims were correct.

Oracle took the top overall spot with a 13.1% market share and revenues of nearly $2.2 billion for 2005. SAP was a leader in supply chain analytics applications, a segment of the overall market, as it claimed, but lagged Oracle in the overall tally. Overall, SAP landed in sixth place with a 5.1% market share and revenues of a little over $838 million in 2005. SAS, IBM, Microsoft and Business Objects took the second through fifth slots, respectively.

For more on SAP business analytics applications
Check out how IDC sized up the business intelligence segment of the market

Read how Oracle fared in Gartner's Magic Quadrant for data warehousing systems

Find out how IBM is approaching the business intelligence market

For a more granular idea of market share, IDC breaks down the market into business analytics tools, such as generic data warehousing, BI, query and reporting tools, and business analytics applications that address CRM, finance or supply chain analytics. Within the tools segment, Oracle again took the top spot, followed by IBM and Microsoft. Oracle's position is mostly due its data warehouse market dominance, Vesset said. He expects the database giant to continue to lead the overall market for the "foreseeable future."

"Oracle is putting more emphasis on both analytic applications and BI tools, and the data warehousing market is not going away," Vesset said. "Both Microsoft and Oracle are showing strong growth and stronger interest in the market, which is a change from past years where the market was primarily dominated by the specialty vendors."

But, the application market is a slightly different story. In the segment for supply chain and operational analytics applications, SAP was the revenue leader with $480 million in 2005, followed by Fair Isaac, Oracle and SAS, Vesset said. In the segment for CRM analytic applications, Siebel (now Oracle) took the top spot, followed by SAS and SAP. And, for financial analytics applications, Hyperion had the highest revenues, followed by Cognos and SAP.

Trends in business analytics

IDC predicts that the market for business analytics will grow at a rate of 10% over the next five years, because it's become a top spending priority for many companies, Vesset said.

"In our surveys, we find that [business analytics] is either the No. 1 or No. 2 priority for most organizations, along with security software," Vesset said.

Compliance has increased interest in analytics and BI, since companies want to have confidence in their numbers and be able to access business data faster, he added. Another major trend is organizations' desire to improve employee accountability and performance management, which are often closely linked with BI or analytics activities. This is driving BI out to more users and inspiring more companies to invest in analytic applications and tools, Vesset said.

Advice for buyers

Buyers evaluating business analytics technology should take into account the volume of mergers and acquisitions over the last few years, Vesset said. Organizations should still look at smaller vendors, but potential acquisition should factor into buying decisions, he said. Vesset also dispelled some of the myths around consolidation and standardization. It's important to unify the data management platform to ensure data integrity -- but not as critical, and often not effective, to consolidate to just one analytics interface or vendor.

"Different tools have strengths in different areas. It's unlikely that anyone will be satisfied with a single [analytics] vendor," Vesset said. "We advise buyers to continue to evaluate a number of different tools and not to think that any single one of them could necessarily take care of all of their analytic needs."

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