Global Headquarters: 5 Speen Street Framingham, MA USA P F

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1 COMPETITIVE ANALYSIS Worldwide Business Intelligence Tools 2005 Vendor Shares Dan Vesset Brian McDonough IDC OPINION Global Headquarters: 5 Speen Street Framingham, MA USA P F IDC continues to see healthy demand for business intelligence (BI) tools. Although there are signs of a shift in the competitive landscape, BI tools remain an attractive market for software vendors and one of the top investment priorities for end-user organizations. Market highlights include:! An 11.5% growth rate was achieved in 2005 for a total market size of $5.7 billion in worldwide software revenue.! Broader adoption of BI software is expected to continue as more end users gain access to query and reporting tools and as organizations embed BI software into operational applications supporting all business processes.! Interest in advanced analytics for forecasting, optimization, and other decision support techniques is growing as organizations look to move beyond using BI tools only for query and reporting. Filing Information: July 2006, IDC #202603, Volume: 1, Tab: Vendors Analytics and Data Warehousing Software: Competitive Analysis

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3 IN THIS STUDY This IDC study examines the business intelligence (BI) tools market and vendor shares for the period Worldwide market sizing is provided for 2005, with trends from Geographic and operating system splits for the overall market are provided in addition to a vendor competitive analysis, with revenue and market share for the leading vendors for This study also includes profiles of leading vendors and identifies the characteristics that vendors will need to be successful in the future. Methodology See the Learn More section for a description of the data collection and analysis methodology employed in this study. In addition, please note the following:! The information contained in this study was derived from the IDC Software Market Forecaster database as of May 26, 2006.! All numbers in this document may not be exact due to rounding. For more information on IDC's software definitions and methodology, see IDC's Software Taxonomy, 2006 (IDC #34863, February 2006). Business Intelligence Market Definition IDC defines the BI tools market as being composed of two market segments: query, reporting, and analysis (QRA) and advanced analytics. A further segmentation by software packaging divides the market into standalone and database-embedded BI tools:! End-user query, reporting, and analysis. Query, reporting, and analysis software includes ad hoc query and multidimensional analysis tools as well as dashboards and production reporting tools. Query and reporting tools are designed specifically to support ad hoc data access and report building by either IT or business users. This category does not include other application development tools that may be used for building reports but are not specifically designed for that purpose. Multidimensional analysis tools include both online analytical processing (OLAP) servers and client-side analysis tools that provide a data management environment used for modeling business problems and analyzing business data. Packaged data marts, which are preconfigured software combining data transformation, management, and access in a single package, usually with business models, are also included in this functional market.! Advanced analytics. Advanced analytics software includes data mining and statistical software (previously called technical data analysis). It uses technologies such as neural networks, rule induction, and clustering, among others, to discover relationships in data and make predictions that are hidden, not apparent, or too complex to be extracted using query, reporting, and 2006 IDC #

4 multidimensional analysis software. This market also includes technical, econometric, and other mathematics-specific software that provides libraries of statistical algorithms and tests for analyzing data. Although statistics products vary in sophistication, most provide base-level functions such as frequencies, cross-tabulation, and chi square. This market also includes a specialized form of statistical software focused on functional areas such as the industrial design of experiments, clinical trial testing, exploratory data analysis, and high-volume and real-time statistical analysis. Business Intelligence Tools Taxonomy Update In light of the recent changes in the business intelligence market, IDC has changed the taxonomy by which it accounts for market sizing and vendor shares in the BI software market. The following changes are reflected in the current BI market study:! The packaged data mart market was merged into the end-user query, reporting, and analysis market.! The data mining and technical data analysis tools markets were merged to create the new advanced analytics software market.! Database-embedded BI server products such as OLAP, data mining, and reporting servers are now accounted for in the BI tools market rather than the data warehouse (DW) management tools market. For full details on these taxonomy and methodology changes, see IDC's Worldwide Business Intelligence Software Taxonomy, 2006 (IDC #34994, March 2006). SITUATION OVERVIEW The Business Intelligence Market in 2005 In 2005, the BI market grew 11.5% to reach $5.7 billion in worldwide license and maintenance revenue. As Table 1 shows, the database-embedded BI server market experienced a higher growth rate (19.9%) than did standalone BI software (10.7%). The query, reporting, and analysis market outgrew the advanced analytics market in We had anticipated a higher growth rate for advanced analytics. One of the reasons for the lower-than-expected performance of this market segment was a larger-than-expected shift in revenue to query, reporting, and analysis tools as well as to packaged analytic applications by SAS, the largest advanced analytics tools vendor. 2 # IDC

5 TABLE 1 Worldwide Business Intelligence Revenue by Segment, ($M) Growth (%) Growth (%) Standalone Query, reporting, and analysis 3, , , Advanced analytics , , Subtotal 4, , , Database embedded Total 4, , , Source: IDC, July 2006 Performance by Geographic Region in 2005 Figure 1 shows the geographic breakdown of the BI market. The Americas region continues to be the largest segment of the market, followed by Europe, the Middle East, and Africa (EMEA) and Asia/Pacific. Further details and analysis of specific regional and country-level trends and market shares are available from IDC. FIGURE 1 Worldwide Business Intelligence Tools Revenue Share by Region, 2005 Asia/Pacific (11.3%) EMEA (35.8%) Americas (52.9%) Total = $5.725B Source: IDC, July IDC #

6 Performance by Operating Environment in 2005 Figure 2 shows the operating environment breakdown of the BI market. Windows continues to dominate the market, followed by Unix and mainframe platforms. Although Linux represents only a small fraction of the worldwide OS share of the BI market, it is by far the fastest-growing platform. New open source BI initiatives are likely to sustain or accelerate this trend. FIGURE 2 Worldwide Business Intelligence Tools Revenue Share by Operating Environment, 2005 Linux/other open source (0.6%) Other (11.0%) i5 and OS/400 (1.2%) Mainframe (12.1%) Windows 32 and 64 (54.5%) Unix (20.6%) Total = $5.725B Source: IDC, July 2006 Performance of Leading Vendors Although the overall market continues to grow in the forecast range, the performance of individual vendors varies widely. As in other steadily maturing markets, the share of the top 10 BI vendors continues to increase from 57.9% in 2003 to 60.8% in 2004 to 62.3% in IDC continues to expect further consolidation also through mergers and acquisitions. Table 2 shows the performance of leading BI vendors. 4 # IDC

7 TABLE 2 Worldwide Business Intelligence Revenue by Vendor, Revenue ($M) Share (%) Growth (%) Growth (%) Business Objects SAS Institute Cognos Microsoft Hyperion Solutions Oracle MicroStrategy SAP AG SPSS Information Builders IBM Actuate Hummingbird Visual Numerics Fujitsu Ltd Lawson Software CA arcplan QlikTech ProClarity Teradata (NCR) Other 1, , , Total 4, , , Source: IDC, July IDC #

8 Business Objects Business Objects ended 2005 again as the leading BI software vendor, with $795 million in BI tools revenue and a 14% market share. Business Objects is the dominant query, reporting, and analysis vendor, with a broad user base spanning all major geographic regions, company size segments, and industries. Building on this base, the company has ambitious goals for growth. This growth can either be organic or involve further acquisitions. Both paths will likely contribute to Business Objects' top line over the foreseeable future, with most of the organic growth coming from query, reporting, and analysis tools from both expanding the company's user base within enterprise accounts and deeper penetration of midsize organizations. However, competitive pressures, especially from database vendors, suggest that organic growth will not be sufficient to maintain even low double-digit growth rates for software revenue, which would make another acquisition an attractive option for Business Objects. Such an acquisition is unlikely to be in the company's existing stronghold segment of query, reporting, and analysis but could instead involve adding advanced analytics, search, business process management, or packaged analytic applications products into its portfolio. SAS Institute SAS was the second-largest vendor in 2005, with $582 million in BI tools revenue and a 10.2% market share. Fifty-nine percent of SAS' BI tools revenue comes from advanced analytics software. However, in 2005 the company saw strong performance from its Enterprise BI Server product suite, which resulted in a 26% growth in its query, reporting, and analysis revenue (for more details see SAS Revamps Its BI Software and Finds Traction Outside Its Core Competency of Data Mining and Statistics, IDC #34846, February 2006). SAS is also continuing to find success in specialty analytic applications that take advantage of its advanced analytics tools. Examples include applications for various types of forecasting, optimization, and descriptive and predictive analytics. Although this revenue is not accounted for in the current BI tools study, it influences the company's overall product mix and in aggregate has a tempering effect on BI tools revenue. In the short term, IDC does not see any serious challenge to SAS' dominance of the advanced analytics market and expects the company to continue to experience above-market growth rates for query, reporting, and analysis. However, at the same time there is likely going to be a long-term, continuous shift toward more packaged analytic applications. Cognos Cognos finished 2005 as the third-largest BI vendor, with $567 million in BI software revenue and a 9.9% market share. Like its longtime rival Business Objects, Cognos experienced competitive market pressures, which kept its query, reporting, and analysis revenue growth rate below that of the market. IDC speculates that the company's ReportNet product, which had tremendous growth when it was first 6 # IDC

9 introduced at the end of 2003, encountered tough competition from the many reporting products in the market from specialty BI and database vendors. Although Cognos still derives a majority of its revenue from BI tools, the company experienced a higher growth rate in its business performance management applications than it did in BI tools. This trend is indicative of a steady shift toward a focus on analytic applications. As the market for BI tools matures, Cognos is likely to continue to expand on its strategy of both developing and acquiring packaged analytic applications in areas such as workforce analytics (released in 2006), supply chain analytics, customer analytics, and business performance management. This expected shift will put internal pressure on BI tools. However, these trends take years to play out; in the meantime, Cognos remains solidly one of the top BI tools software providers. Microsoft IDC estimates the value of Microsoft's BI tools at $353 million, which puts the company into fourth place with a 6.2% market share. Among its closest competitors, Microsoft is a relative newcomer to the BI tools market; the company introduced its OLAP server at the end of Nevertheless, Microsoft has seen strong growth over the past several years as it has expanded and enhanced its database-embedded BI features and combined them with related tools such as data integration. Specifically, the high growth rate in 2004 is attributed to the release of SQL Server Reporting Services. More recently, Microsoft acquired ProClarity. (The acquisition closed in 2006; therefore, IDC has shown the two companies as separate entities in this 2005 market share study.) This acquisition filled an important gap in Microsoft's BI software portfolio. The company now has not only server-side BI engines for OLAP and data mining but also a Web-based (as well as thick-client) end-user query, reporting, and analysis tool. Microsoft's impact on the BI tools market cannot be overemphasized. Currently this is especially true with respect to its Reporting Services and Analysis Services products. However, the company is also going to have an impact at the "front end" of BI in the coming years. Note that although Microsoft Excel is not counted as a purpose-built BI tool, Microsoft's recent focus on promoting Excel as a key interface for BI is also going to have a negative impact on competition. Again, this impact will not create any sudden material shifts in the market, but an evolutionary change has been put into motion by the database vendors, and it will reshape the BI tools market over the next 15 years. Hyperion Solutions Hyperion recorded a strong year of BI tools sales with revenue of $287 million and a 5% market share. The growth was driven by the new Hyperion System 9, which in essence was the first major release of a combined BI suite incorporating the best of Hyperion and former Brio technologies. It's also interesting to note that Hyperion had weaker-than-expected results in its financial and business performance management (BPM) applications business lines. These two major revenue streams for Hyperion seem to oscillate in performance as sales and marketing efforts shift from year to year. Hyperion remains the largest financial and BPM analytic applications vendor, 2006 IDC #

10 and over the long term, IDC expects Hyperion to experience higher growth rates in this product line rather than in BI tools. Oracle Oracle's BI tools revenue in 2005 came in at $247.7 million, which increased its market share to 4.3%. The company derives BI revenue from both databaseembedded BI servers and end-user query, reporting, and analysis tools. There was a clear increase in marketing emphasis on BI in 2005, and IDC expects Oracle to continue above-market growth rates in BI tools as the current market cycle plays itself out over the next 15 years. Having said that, Oracle has had other marketing pushes into BI in the past, which did not necessarily result in expected sales execution. At Oracle, its BI tools must compete not only with other vendors' products but also with its own analytic applications and Daily Business Intelligence, a component of the company's e-business Suite (not accounted for in this study). Oracle's market position in BI tools and analytic applications has been significantly strengthened via its recent application company acquisitions. Oracle's March 2006 launch of a new line of three BI packages was especially newsworthy due to the prominent position of the Siebel Analytics technology (named Analytic Server) that is included in certain bundles, reflecting not only the success of Siebel in analytics, but also the value to Oracle of the federated query technology that underlies the Siebel Analytics products. With its enhanced arsenal of BI technologies, the company set direct aim at the independent BI companies that currently lead the BI market. (For more details see Oracle, Armed with Acquired Ammunition, Reloads for Business Intelligence, IDC #201036, March 2006 and Oracle + PeopleSoft + Siebel: What Does the Combination Mean for BI, Analytics, and Performance Management? (IDC #34382, November 2005.) Comments on Other Selected Vendors! MicroStrategy continues to deliver on a strong product suite, which remains an attractive option for many large-scale BI deployments that benefit from its underlying relational OLAP (ROLAP) infrastructure. Its reporting tool, general user interface, and development functionality remain at the forefront of innovation and usability. However, the company's phenomenal growth rates of the past few years finally caught up with it, and the software growth rate halved to a still respectable 15%.! SAP's presence in the BI tools market is derived from tools related to its NetWeaver platform that are primarily focused on the analytic server formerly marketed as SAP BW. SAP is a significantly stronger player in packaged analytic applications. However, the company's core applications business does require a supporting tools infrastructure, and increasingly, SAP does not want to relegate that opportunity to competitors.! SPSS is the second-largest advanced analytics vendor. Its focus on predictive analytics paid off in 2004 and 2005 after several years of lower-than-market growth rates. In many cases, SPSS has also been able to cross-sell its query, reporting, and analysis tools into its base of advanced analytics customers. 8 # IDC

11 ! Information Builders Inc. (IBI) saw yet another shift in its product mix to WebFocus from Focus, which accounts for the strong growth of its BI tools in After 30 years, IBI remains a viable player in the BI market, with new products such as WebFocus ActiveReports, promising partnerships with GIS and search vendors, and the synergy between its own BI and iway data integration business. IBI also remains one of the most scalable reporting environments on the market.! IBM saw a modest 6% increase in its BI revenue, reversing a negative growth rate from the previous year. Like its major database competitors, IBM has followed the path of embedding more BI functionality into its DB2 database. This technology includes both multidimensional analysis through DB2 Cube Views and data mining through DB2 Enterprise Miner. Cube Views, along with IBM QMF and AlphaBlox, composes IBM's query, reporting, and analysis software. To date, IBM has made an explicit choice not to enter the query, reporting, and analysis market focused on business end users. The company has placed primary emphasis on its BI, DW, and data integration platform. However, it's not inconceivable that IBM will follow its database competitors and enter the business end-user BI market with either BI tools or packaged analytic applications. Given IBM's history, this shift would likely happen through acquisitions.! Actuate's software revenue has remained stable over the past two years as the company expanded its product line from its core reporting software to more ad hoc analysis tools. At the same time, Actuate continues to have a solid embedded reporting business through the indirect channel both in the commercial world and through its participation in the Eclipse Foundation.! Lawson is one of the few enterprise applications vendors that also has a distinct BI tools product line. The company markets its BI tools exclusively to its installed based of applications customers. Because more users expect to see BI functionality as part of their applications in an integrated workflow, Lawson is capitalizing on this trend. Lawson's recent merger with Intentia has created an even larger applications vendor with presence in both North America and Western Europe. Because Lawson is claiming a 90% attach rate for selling its BI suite with its new applications deals, IDC expects that after a certain period opportunities will surface to expand Lawson's footprint in the BI tools market by also targeting the former Intentia user base.! QlikTech was the fastest growing of the top 20 BI tools vendors in Although still of modest size with $22 million in software revenue, the company grew over 70% in each of the past two years. QlikTech's expansion from its European base into North America has been received well, and IDC expects continued aggressive growth for the company in its chosen midmarket niche. IDC's end-user research has shown that QlikTech's product, QlikView, is attractive due to its ease of installation and ease of use. QlikView takes a very different approach to data management (from all the other major BI vendors) by providing what amounts to "infinite" dimensional ad hoc query and analysis to end users something that traditional OLAP vendors cannot provide with their 2006 IDC #

12 existing products. QlikTech recently also enhanced its reporting tool that enables creation of production reports. Beyond the top vendors whose shares are identified in Table 2, there are many BI vendors whose combined revenue is aggregated under "other" vendors. These software companies range in size, either provide niche products or focus on specific geographic regions or industries, have different channel strategies, and target a range of organizations from SMBs to large enterprises. Two examples of such vendors that have made their mark in the BI market are Noetix and Celequest:! Noetix traces its roots back to Over the years the company has established a customer base of 1,300 organizations to which it provides BI tools that are well positioned within the architecture of enterprise applications such as Oracle e-business Suite and Siebel. Although the company has an easy-to-use dashboarding technology for end users, its primary value proposition comes from the methods used to access and retrieve data from the enterprise applications in order to support operational BI efforts. The mappings that Noetix has created to these enterprise applications enable its customers to deploy the Noetix system rapidly. As the underlying enterprise applications are modified, Noetix software is able to automate many of the otherwise manual mapping requirements. This automation lowers total cost of ownership and alleviates the pressure on already resource-constrained IT departments.! Celequest began in 2002 as a business activity monitoring vendor founded by Diaz Nesamoney (cofounder of Informatica). Since then the company has expanded its product suite to focus on operational BI through both data integration and dashboarding tools. In addition, Celequest recently announced the availability of LAVA, the industry's first BI appliance offering, which combines Celequest's software with commodity hardware. FUTURE OUTLOOK The Next Wave of Business Intelligence Just as security technology is something without which organizations can't survive, so is BI technology something without which organizations can't succeed. However, BI as a set of tools and concepts for managing organizational and individual performance still has a long way to go in reaching all of the necessary people and processes in companies, government agencies, hospitals, and universities. IDC research into the BI market has identified that it moves in 15-year cycles. The first of these periods, from 1975 to 1990, was characterized by production reporting on mainframes. (Companies such as SAS, IBI, and IBM began in the BI market during the early years of this cycle.) The second 15-year period, from 1990 to 2005, saw the beginning of the "modern era" of BI, characterized by end user friendlier client/server-based BI tools from vendors such as Business Objects, Cognos, and Hyperion. Eventually query, reporting, and OLAP technology migrated from client/server to Web-based architecture with the development of broad suites of BI platforms. 10 # IDC

13 When we look back in a few years, we'll see that 2005 was another turning point in the BI market and the beginning of the new wave of investment in BI by organizations in all industries. The current market cycle is expect to last until 2020 and will be focused on expanding the reach of BI to more users both inside and outside the organization and a move to automate more decision processes by combining QRA and advanced analytics functionality. As the BI market is maturing, the focus of organizations, BI software vendors, and systems integrators is changing. To date, the BI market has primarily focused on delivery of information to analysts and managers. Progress has been made in delivering information faster and through various means (e.g., reports, dashboards, and alerts on PDAs). However, analysts and managers represent only a relatively small portion of an organization, estimated at about 15 20% of employees. In fact, IDC believes that the market for reporting and OLAP tools for power users and analysts has reached a level of maturity that cannot sustain the growth rates of the past in terms of new license revenue. Instead, larger IT vendors such as Microsoft, Oracle, and IBM along with the existing specialty BI vendors are now targeting this market. As the market continues to mature, it is highly likely that the larger IT vendors will continue to gain share. But what about the rest of the organization? Whether we're talking about information workers with higher levels of freedom to decide about their daily workflows and processes or line-of-business employees who may be restricted by systems and policies in how they perform their duties, a vast population exists whose business intelligence requirements have not been met to their full potential. The next wave of BI will reach out to these employees as well as other organizational stakeholders such as suppliers, partners, customers, and government agencies to improve information delivery and decision support functionality for all. This shift in market focus can be only partially addressed through existing BI software, which as already mentioned was created with the analyst or power user as the intended audience. Clearly a frontline employee will have limited use for an OLAP or an ad hoc query tool. In fact, to address the needs of frontline employees and lineof-business managers, organizations must redefine and expand what they mean by BI. The expanded vision of BI must take into account not only the technologies involved but also business drivers and performance management methodologies. Business Drivers for the Next Wave of BI Compliance BI can help drive consistency in decision making. It's important to make correct decisions, but often it is also important that decisions are not made arbitrarily (i.e., that different employees followed similar decision processes, which can be audited or monitored). Competitive Pressures Within the process of performance management, it is important to go beyond simply dashboards and reports that focus only on information delivery. To put BI into an 2006 IDC #

14 operational context, it's not enough to have dashboards that simply report on what happened. This information is valuable but of limited use. Dashboards should also show context around the information and provide guidance for action. In other words, they need to be in the context of whatever business process the dashboard is built for and support predictive analytics. Intercompany Connectivity The final driver is intercompany connectivity, or the linking of business processes with partners, suppliers, and customers. It is important in these cases to have a more comprehensive view of operations that goes outside the organization. The Changing Nature of BI Projects At the same time, the discussion around BI implementations is changing from one of technology to one of best practices in the process of performance management. Some of the questions being asked include:! What KPIs should be tracked, measured, and acted upon?! How should BI competency centers be established and managed?! How should master and metadata as part of broader data quality and compliance effort be managed? Other Key Emerging Trends Availability and Scalability BI technology must evolve to address the needs of the ever-broadening audience of users. As more data becomes available for analysis and more users expect to receive decision support based on this data, the scalability and availability requirements of BI systems are becoming more robust. IDC research shows that already today, over 40% of organizations indicated that if their BI systems go down for just a few hours, there will be significant material impact on their operations. At this point, BI systems have not yet reached the requirements of operational systems; however, the trending is toward a convergence of availability requirements between analytics and operational systems. Traditional BI and Unstructured Content Access and Analysis Another key emerging trend in the market is the convergence of traditional BI tools and unstructured content access and analysis tools (including search technology). In fact, it's quite likely that some of the emerging BI applications will closely resemble common online community sites with the associated functionality for graphs, tables, search, comments, notes, ratings, and other collaborative community features. It is also clear that search as a ubiquitous interface has the potential to penetrate many more users than end-user BI tools, which historically have required more training. As such, the search technology has the potential to displace traditional BI tools in certain ad hoc analysis and information retrieval use cases. 12 # IDC

15 Intelligent Process Automation Finally, BI will find its way to the vast majority of users by being embedded within the operational applications already used by these end users. IDC calls this evolving concept intelligent process automation (IPA). IPA is the convergence of BI and business process management technologies. It is the automation of repeatable, operational decisions (not the more infrequent strategic decisions made at the executive level). This is not to say that IPA replaces executive dashboards or ad hoc BI solutions; the two technologies have different audiences and serve different needs. However, only IPA can help automate repeatable, operational decisions to address both performance management and compliance issues. Impact of Open Source BI Tools The last couple of years have shown the first signs that open source software is creeping into the BI tools market. The focus here is not on traditional BI tools deployed on open source operating environments, but instead truly open source BI software. Vendors such as Pentaho, JasperSoft, and Actuate clearly display the first signs of a potential market niche. However, we believe that the impact of open source BI tools will be very limited over the next five years. During the latter part of the current 15-year cycle of the BI market, open source software may develop into a stronger competitive force. However, unlike in the operating systems or database markets where open source technology addresses a vast mass market, the BI market is not large enough or "generic" enough to support significant open source offerings in the foreseeable future. Market Context Vendor shares were last published for the business intelligence market in Worldwide Business Intelligence 2004 Vendor Shares (IDC #33564, June 2005). The differences in the vendor shares shown in this study and that earlier study are due to taxonomy and methodology changes described in IDC's Worldwide Business Intelligence Software Taxonomy, 2006 (IDC #34994, March 2006). ESSENTIAL GUIDANCE End Users When you're developing your BI strategies, look not only at the traditional software for query and reporting or at the decision support needs of power users. Instead, expand your efforts to include features such as business process management, collaboration, workflow, and annotations in addition to new scalability and availability characteristics. Software Vendors As the BI market matures, it is bifurcating into large providers of standard query, reporting, and analysis technology and specialty vendors whose tools and/or analytic applications increasingly focus on narrower (industry- and/or business process 2006 IDC #

16 specific) solutions. In the latter group, scale will increasingly matter. Perhaps the market can sustain only four to five large-scale BI vendors. However, there is plenty of room for specialists, and in fact there remains a great need for such specialists. Not all of the top 20 vendors listed in this study will survive the next cycle in the BI market as independent vendors. M&A activity is likely to continue and increasingly bring together players from different but related disciplines such as search, business process management, workflow management, collaboration, and portals. Services Vendors IDC's Worldwide Business Analytics Services Forecast (IDC #202492, July 2006) exposes the services component around BI software and related business analytics solutions. What is clear is that both large systems integrators (SIs) and smaller specialty consultants are in a period of aggressive hiring into their BI/DW practices. Technical and business consulting around BI or performance management is an attractive opportunity. However, software vendors themselves are also looking to tap into this market because some of them see their new license revenue growth rates slow. LEARN MORE Related Research! Worldwide Business Analytics Services Forecast (IDC #202492, July 2006)! Business Analytics Appliances Are Here to Stay (IDC #202071, June 2006)! Worldwide Business Intelligence Tools Forecast (IDC # April 2006)! IDC's Worldwide Business Intelligence Software Taxonomy, 2006 (IDC #34994, March 2006)! IDC's Software Taxonomy, 2006 (IDC #34863, February 2006)! Intelligent Process Automation: To Make Business Processes Intelligent Means Making Business Intelligence Operational (IDC #34767, January 2006)! Worldwide Business Intelligence 2004 Vendor Shares (IDC #33564, June 2005) Appendix A: Business Intelligence Market Segment Vendor Shares End-User Query, Reporting, and Analysis Table 3 provides data for worldwide end-user QRA tools. 14 # IDC

17 TABLE 3 Worldwide End-User Query/Reporting/Analysis Revenue by Vendor, Revenue ($M) Share (%) Growth (%) Growth (%) Business Objects Cognos Microsoft Hyperion Solutions SAS Institute Oracle MicroStrategy SAP AG Information Builders IBM Actuate Corp Hummingbird Lawson Software Fujitsu Ltd CA SPSS arcplan QlikTech ProClarity Other , Total 3, , , Source: IDC, July IDC #

18 Advanced Analytics Table 4 provides data for worldwide advanced analytics tools. TABLE 4 Worldwide Advanced Analytics Revenue by Vendor, Revenue ($M) Share (%) Growth (%) Growth (%) SAS Institute SPSS Visual Numerics Oracle Teradata (NCR) IBM Insightful Microsoft Hitachi Ltd Fair Isaac Silicon Graphics Fujitsu Ltd Software AG Unica Corp ANGOSS Software Other Total 1, , , Source: IDC, July # IDC

19 Appendix B: Methodology The IDC software market sizing and forecasts are presented in terms of "packaged software revenue." IDC uses the term packaged software to distinguish commercially available software from "custom" software, not to imply that the software must be shrink-wrapped or otherwise provided via physical media. Packaged software is programs or codesets of any type commercially available through sale, lease, or rental or as a service. Packaged software revenue typically includes fees for initial and continued right-to-use packaged software licenses. These fees may include, as part of the license contract, access to product support and/or other services that are inseparable from the right-to-use license fee structure, or this support may be priced separately. Upgrades may be included in the continuing right of use or may be priced separately. All of the above are counted by IDC as packaged software revenue. Packaged software revenue excludes service revenue derived from training, consulting, and systems integration that is separate (or unbundled) from the right-touse license but includes the implicit value of software included in a service that offers software functionality by a different pricing scheme. It is the total packaged software revenue that is further allocated to markets, geographic areas, and operating environments. The market forecast and analysis methodology incorporates information from five different but interrelated sources, as follows:! Reported and observed trends and financial activity. This study incorporates reported and observed trends and financial activity in 2005 as of the end of April 2006, including reported revenue data for public companies trading on North American stock exchanges (CY 1Q05 4Q05 in nearly all cases).! IDC's Software Census interviews. IDC interviews all significant market participants to determine product revenue, revenue demographics, pricing, and other relevant information.! Product briefings, press releases, and other publicly available information. IDC's software analysts around the world meet with hundreds of software vendors each year. These briefings provide an opportunity to review current and future business and product strategies, revenue, shipments, customer bases, target markets, and other key product and competitive information.! Vendor financial statements and related filings. Although many software vendors are privately held and choose to limit financial disclosures, information from publicly held companies provides a significant benchmark for assessing informal market estimates from private companies. IDC also builds detailed information related to private companies through in-depth analyst relationships and maintains an extensive library of financial and corporate information focused on the IT industry. We further maintain detailed revenue by product area models on more than 1,000 worldwide vendors IDC #

20 ! IDC demand-side research. This includes thousands of interviews with business users of software solutions annually and provides a powerful fifth perspective for assessing competitive performance and market dynamics. IDC's user strategy databases offer a compelling and consistent time-series view of industry trends and developments. Direct conversations with technology buyers provide an invaluable complement to the broader survey-based results. Ultimately, the data presented in this study represents IDC's best estimates based on the above data sources as well as reported and observed activity by vendors and further modeling of data that we believe to be true to fill in any information gaps. Copyright Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2006 IDC. Reproduction is forbidden unless authorized. All rights reserved. Published Under Services: Analytics and Data Warehousing Software; Business Intelligence and Data Warehousing Strategies 18 # IDC