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September 17, 2003

Weasku Intelligence

BI, heading into uncharted waters, must change quickly if it is to lead the way

by David Stodder

Not far away, you could hear the Rogue River pour across its rocky bed in pursuit of deeper zones where the current could easily circulate throughout a large body of water. Out the window, pine trees lifted the canopy high above the lodge and its grassy landscape. Eagles, hawks, and other big birds rested atop the trees until later, after the swimmers, rafters, and boaters had gone home, when they would turn their sharp and hungry eyes to the water.

There's something about being at the water's edge that promotes reflection. Thanks to the generous hospitality of Humphrey Strategic Communications, four top business intelligence and data warehousing experts found themselves inside the Weasku Inn in Grants Pass, Oregon, debating the end of one era and the beginning of another. Joining the conversation was an astute audience invited from the vendor community, whose members brought an intense desire to seize upon insights that would help them connect with customers amid change. I had the good fortune of chairing this roundtable discussion. The occasion was the 2002 Pacific Northwest Business Intelligence Summit.

In an earlier era, the Weasku scene might have included Clark Gable, Carole Lombard, Bing Crosby, and other celebrities sunk down in leather chairs or posing with their prize catches, most likely Chinook salmon. Gable in particular was a frequent guest, visiting this small town in southern Oregon regularly at the height of his Hollywood fame. One can only imagine the local hearts aflutter that this rakish actor would set in motion.

Compared to Gable, the summit's celebrities slipped into town relatively unnoticed. However, their names are no doubt familiar to readers involved in BI and data warehousing: Claudia Imhoff, president and founder of Intelligent Solutions; William McKnight, president and founder of McKnight Associates; Colin White, president and founder of Intelligent Business Solutions; and Mark Smith, head of Ventana Research and contributing editor to Intelligent Enterprise. All are popular speakers at events dedicated to strategic IT and business performance management. [Quick plug: You can catch Colin and Mark at the upcoming IntelligentBPM Conference & Expo, Sept. 28-30 in San Francisco. See www.intelligentbpm.com/conference.]

Mergers and Acquisitions

Hard to avoid, the first topic of discussion was what's going on in the BI industry itself. Over the past few weeks, only baseball teams trying to beat the Major League's trading deadline have been more active in swapping talent. Two moves that led the way were Business Objects' acquisition of Crystal Decisions Inc. and Hyperion Solution's purchase of Brio Software Inc.; more have come since. Earlier in the year, Cognos and SAS were also active.

"It's back to basics," said White. "From my perspective, BI vendors have been moving into a variety of areas, like analytic applications, with mixed success. Now, they are hearing from their customers, who want to consolidate the number of vendors they're dealing with. You also have the database vendors pushing BI functionality into their offerings. It's time for the BI vendors to refocus on getting a complete set of BI tools together."

"Let's face it, the heads of all the major BI vendors have big bonuses on the line if they can hit the billion dollar revenue level," said Smith. "Getting to that level is essential if these companies are really going to support BI on everyone's desktop. When you have something on everyone's desktop, it means that it's part of the enterprise infrastructure — and I think that's where BI is headed. If nothing else, you have to be a billion-dollar company to do all the R&D and marketing to compete with the massive resources of infrastructure companies like IBM, Oracle, Microsoft, and SAP."

What about some of the other companies out there that didn't participate in the merger mania? "Very smartly, Informatica pulled back from analytic applications to concentrate on [its] core competence and compete effectively against Ascential Software [Corp.]," Smith observed. "Informatica just didn't have enough capital to fuel this initiative." The consultants saw MicroStrategy ("back from the dead," in McKnight's words) and other smaller BI players pursuing niche strategies with success as long as they can fit into customers' emerging BI frameworks.