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Posted 06 September 2012

Business Analytics – has the bubble burst?

Nigel Cummings

Slowing growth predicted for business analytics

Software that businesses use to analyse ever-rising volumes of data - and then use that analysis to improve business - has helped drive growth for IBM, Oracle and SAP, some of the largest makers of business software. According to a survey conducted by IDC, the sector's annual sales growth is predicted to fall to single digits this year. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC blames a slowing global economy, coupled with a maturing market and a lack of workers trained to make the best use of the analytics.

“The market has definitely matured,” said IDC analyst Dan Vesset. “It's primarily macroeconomics. But there is a level of complexity (with the software) and we are generally finding a lack of a sufficient number of analytics experts.”

According to IDC, Global sales growth of business analytics software, used by banks, retailers, and others, will fall to 9.8% this year from 14.1% last year. Sales will remain healthy though as a reduction to 9.8% still equates to predicted worldwide sales of around $50.7 billion in 2016, up from $35.1 billion this year.

Helping to drive this growth is media attention focused on Big Data, putting broader business analytics on the agenda. Additionally, new business analytics software options based on non-relational data management technology are forcing vendors to accelerate research and development on new tools and applications and the integration of new and existing technologies.

Of the three primary segments of the worldwide business analytics software market, the data warehousing platform software segment grew the fastest in 2011 at 15.2%, followed by the analytic applications segment, at 13.3% and the BI and analytic tools segment, which only managed a 13.2% growth.

Additional findings from IDC's research include:

As more organisations with less business analytics experience are becoming interested in this technology, vendors and users will have to devote more resources to business analytics services.

A growing emphasis on industry and business process-specific analytic applications is going to take hold over the forecast period. Recent acquisitions by large business analytics vendors such as IBM and SAP will require ever finer segmentation of target audiences by industry, region, and organisation size.

The growth in outsourcing deals for business analytics technology will likely mean that end users will pay increasingly less attention to specific technology components, instead focusing on business value and overall functionality.

The study, Worldwide Business Analytics Software 2012-2016 Forecast and 2011 Vendor Shares (IDC #235494) examined the business analytics software market for the period from 2007 to 2016, with vendor revenue trends and market growth forecasts. More information pertinent to the study can be located at: www.idc.com