TBR Webinar: Agility as the Key to Revenue Growth in the BI Software Market

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T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

Agility as the Key to Revenue Growth in the Business Intelligence Software Market

Insights from TBR’s 4Q13 Business Intelligence Software Vendor Benchmark Technology Business Research Quarterly Webinar Series

April 8, 2014

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2 TBR Quarterly Webinar Series| 4.8.14 | www.tbri.com | ©2014 Technology Business Research Inc.

Insights from TBR’s 4Q13 Business Intelligence (BI) Software Vendor Benchmark: Presenters

Matt Healey Principal Analyst Email: [email protected] Twitter: @Mhealey_TBR

Elizabeth Hedstrom Henlin Senior Analyst, Software and Applications Email: [email protected] Twitter: @EAHHTBR

mailto:[email protected]


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TBR delivers actionable intelligence on the maturing BI market to help clients bridge the gap between buyer aspirations and vendor actions

Note: Software vendors under consideration for 2014 report launch include Tableau Software, Splunk and QlikTech; TBR also publishes a semiannual vendor

report on SAS Institute in the second and fourth calendar quarters.

Insights from TBR’s 4Q13 BI Software Vendor Benchmark: Program Overview

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Insights from TBR’s 4Q13 BI Software Vendor Benchmark: Overview

TBR evaluates the business intelligence (BI) software market across 4 key segments and across a main model of delivery

Note: Business Intelligence and Analytics Engineered Systems is discussed as an accretive revenue model and delivery component within this benchmark, reflecting some contributions from all four software segments.

Integrated solutions encompassing multiple points of BI functionality in a single product

Point products addressing single- or dual-purpose deployments of BI functionality

Data warehousing and related information management products deployed in support of

business intelligence

Basic BI Tools

Advanced BI Tools

Data Warehousing

Business Intelligence and

Analytics Engineered Systems

BI Applications and Platforms

Delivery method for BI software, inclusive of hardware, software and support revenue

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Subsegments within TBR’s BI software taxonomy align to buyer maturity and the features they self-select along their BI purchasing journey TBR BI Software Taxonomy Subsegments

Reporting, Queries,Spreadsheets

Basic BI Tools

Dashboards, Scorecards

Online Analytical Processing(OLAP)

Data Discovery

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Subsegments within TBR’s BI software taxonomy align to buyer maturity and the features they self-select along their BI purchasing journey (cont.) TBR BI Software Taxonomy Subsegments

Data Mining

Advanced BI Tools Event Processing

Data Visualization

Content Analytics

Predictive Analytics

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Key Takeaways: TBR’s 4Q13 Business Intelligence

Software Vendor Benchmark

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Insights from TBR’s 4Q13 BI Software Vendor Benchmark: Market Outlook

CY4Q13 BI Software Market Summary

To drive growth in a maturing BI software market, vendors focus near-term investments on S&M to keep customers engaged

BI Software remains a critical priority for customers and provides enterprise software vendors like IBM, SAP, Oracle and HP with an opportunity to jump-start license sales and possibly improve overall market positions.

Basic and Advanced BI Tools segments remain a category for multi-line vendor investigation – evaluating and acquiring disruptive technologies to accelerate solution creation.

Pure-play BI firms including Splunk and Pentaho are accelerating investments ahead of competitive firms, scaling S&M and R&D as a percentage of revenue, respectively, to find the next wave of growth.

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2013 BI Software Market Outlook

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The BI software market remains largely fueled by the actions of enterprise software leaders, but disruptors continue to evolve the landscape TBR Estimates — BI Software Market

Estimated 4Q13 YTY growth across the landscape: ~13% Estimated 4Q13 YTY growth across covered vendors: ~8%

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Covered Vendors BI Revenue Growth: Percentage and Dollar Growth

Laggards

Leaders

Hadoop vendors including Hortonworks and Cloudera emerge as 4Q13 BI growth leaders, gaining traction with alliances and proven performance

Pure-play vendors including Hortonworks, DataStax and Domo are breaking away from the pack in terms of revenue growth, as they capitalize on momentum from funding rounds to increase R&D efforts and expand global presence.

Revenue contribution leader IBM’s recent acquisition of Cloudant enables it to more effectively compete against high-growth vendor DataStax’s Cassandra offering in the Database as a Service market.

NOTE: Kaggle is excluded from current averages.


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BI Software Market Segmentation

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Enterprise software vendors capitalize on their established presence in the Basic BI Tools segment to maintain growth leadership positions

Profit leaders Dell and Oracle are able to capitalize on established brands and targeted messaging to attract net-new BI adopters while maximizing S&M spend efficiency.

IBM’s ability to tailor its existing complex analytics solutions to meet the needs of C-suite executives (highlighted by the launch of SPSS Analytic Answers) enables the company to sustain revenue growth leadership while keeping R&D costs low.


Both Informatica and Google have the ability to monetize targeted portfolios for growth in Basic BI Tools, and will look to partner-led growth opportunities as a path to profitable expansion.

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Growing C-suite use of predictive analytics will increase vendors’ investment in Advanced BI Tools point products in broader portfolios

IBM expanded its predictive analytics capabilities in 3Q13 with the launch of SPSS Analytic Answers, which TBR believes will be a differentiated product across CY14.

Predictive analytics will be a key component of vendors’ BI portfolios, as the C-suite increasingly adopts analytics tools to gain insights from their core business data. Enterprise vendors will risk negatively impacting margins to either internally develop or acquire predictive analytics capabilities. SAP expanded its advanced BI capabilities with the September acquisition of KXEN, while Dell Software is poised to enter the space in 2H14 with its March acquisition of predictive analytics vendor StatSoft.


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Existing business models ensure enterprise software BI businesses’ spend trends in line with corporate growth, but BI remains a clear priority S&M and R&D as Percent of Revenue: Enterprise Software Vendors

Both Informatica and Dell Software are growing their BI market portfolios, prioritizing S&M and R&D spend together to accelerate sales, install base growth and create revenue gains while minimizing potential performance erosion of core products.

IBM Software’s acquisition-led approach to market expansion, including BI, positions the firm to refocus on R&D spend as a path to an integrated portfolio across 1H CY14.

HP Software’s focus on BI will continue across CY14, with TBR projecting a move into the “Monetize BI Business” quadrant by the end of CY14.

Sales as Rising Priority Monetize BI Business

Innovate and Develop Stable Portfolio

TBR believes Oracle is shifting investment to accelerate BI portfolio integration and growth, aligning BI assets to applications portfolios as an assault on competitors such as IBM, SAP and Microsoft.

2Q13 Position

4Q13 Position


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Public and private BI pure plays are prioritizing growth, but most are mirroring enterprise counterparts in quarterly spending patterns S&M and R&D as Percent of Revenue: Pure-play BI Vendors

Sales as Rising Priority Monetize BI Business

Innovate and Develop Stable Portfolio

Splunk is increasing investment across segments, countering industry trend to accelerate growth.

Both QlikTech and Pentaho, maturing following IPOs, are demonstrating spend in alignment with mature competitors, but Pentaho’s increasing R&D spend suggests new products in development.

Teradata will be challenged to raise its profile relative to competitors such as Oracle without escalating S&M spend relative to the median.

TBR notes that Salient and Information Builders are likely candidates to re-enter the “Innovate and Develop” quadrant in 1HCY14, as these firms evaluate growth alliances and related portfolio integration needs.

2Q13 Position

4Q13 Position


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BI Software Market Projections

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Tools Tied to High-growth Products and Markets: Raising the profile and

adoption of Basic BI tools by attaching them to

products in high-growth markets such as cloud.

Defend and expand current install bases through integration of BI tools, applications and platforms.

Disruptive Technology Driving Cross-segment

Growth: Rising Hadoop

deployments will disrupt the stable data

warehousing market

Disruption of mature market segments

BI to Revive License Sales:

Leveraging integrated BI

applications and platforms

to defend application

install bases.

Vendors that incorporate disruptive technology into solutions will increase both customer adoption and market differentiation in CY14

TBR Projections: 2014 & 2015 Business Intelligence Software Vendor Landscape

Insights from TBR’s BI Software Vendor Benchmark: Market Projections

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Questions?

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For further information, please contact:

Matt Healey Principal Analyst Email: [email protected] Twitter: @Mhealey_TBR

Elizabeth Hedstrom Henlin Senior Analyst, Software and Applications Email: [email protected] Twitter: @EAHHTBR

James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166

Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: https://www.linkedin.com/company/technology-business-research

Insights from TBR’s BI Software Vendor Benchmark: Contact Information




https://twitter.com/TBRinc

http://www.slideshare.net/TBR_Market_Insight

http://www.youtube.com/user/TBRIChannel

https://www.linkedin.com/company/technology-business-research





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Syndicated Research Coverage by Vendor Segment

Software Vendor Reports (Software Business Quarterly)

Benchmarks and Market Landscapes (Benchmark XLS data is also available)

• CA Technologies • Dell Software* • HP Software • IBM Software • Microsoft Corp. • Oracle Corp. • Red Hat • SAP AG • SAS* • Symantec • VMware

• Software Vendor Benchmark The benchmark currently covers 29 firms, encompassing software license, maintenance and professional services revenue.

• Business Intelligence Software Vendor Benchmark* The benchmark includes BI business of select Software Business Quarterly vendors and additional pure-play firms (31 firms as of CY4Q13).

TBR Software Practice Syndicated Coverage

*Semiannual publication; **Annual publication

SourceIT — IT Customer Segment Reports Insight and in-depth study results on N. American and large enterprise budgeting, buyers and competitors across workloads

• SourceIT Banking & Financial Services**

• SourceIT Healthcare**

• SourceIT Public Sector** • SourceIT Retail** • SourceIT Telecom**

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T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

About TBR Technology Business Research, Inc. (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. To learn how our analysts can address your unique business needs, please visit our website or contact us today.

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