Worldwide Business Analytics Software Market Shares, 2015: Healthy Demand Despite Currency Exchange Rate Headwinds

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1 MARKET SHARE Worldwide Business Analytics Software Market s, 2015: Healthy Demand Despite Currency Exchange Rate Headwinds Dan Vesset David Schubmehl Carl W. Olofson Chandana Gopal Stewart Bond July 2016 IDC IN THIS EXCERPT The content for this excerpt was taken directly from the IDC reports: Worldwide Business Analytics Software Market s, 2015: Healthy Demand Despite Currency Exchange Rate Headwinds (IDC # US ); Worldwide Business Intelligence and Analytics Tools Software Market s, 2015: It's Still About Self-Service (IDC # US ); Worldwide Analytic Data Management and Integration Platform Software Market s, 2015: Coexistence of Yes and NoSQL (IDC # US ); and Worldwide Analytic and Performance Management Applications Software Market s, 2015: Cloudy Outlook for On-Premises Software (IDC # US ). EXECUTIVE SUMMARY The worldwide business analytics software market comprises 12 segments as displayed in the Market Definition section of this study and in the taxonomy figure (refer to Figure 1). The worldwide business analytics software market encompasses horizontal tools and prepackaged analytic applications deployed for a broad range of decision support and decision automation use cases and includes software to support the full life cycle of data integration, integrity, analysis, visualization, and related decision support functionality. In 2015, the worldwide business analytics software market grew 2.5% in current currency terms. It's important to highlight that foreign exchange rate changes during 2015 resulted in a significant negative impact on the market when reported in U.S. dollars. In constant currency, the market grew 10.7%. The negative impact of currency exchange rates was more pronounced on vendors that derive a greater portion of their revenue outside of the United States. There was a wide degree of variation in 2015 revenue growth rates among the 12 market segments. The top 3 fastest-growing markets were content analytics, customer relationship analytic applications, and advanced and predictive analytics. The two largest market segments, end-user query, reporting, and analysis and analytic data management, had low growth rates of 0.7% and 2.7%, respectively. Again, the currency issues in 2015 affected the growth rates as reported in current U.S. dollar terms. The big story of 2015 was the beginning of "the great migration" to the cloud. In 2015, the on-premises portion of the overall market contracted by 1.4%, while the public cloud services revenue grew 26.5%. Public cloud portion of the market now represents 17% of the market. It's important to note that there is a significant difference in cloud adoption between analytic applications (40%) and the aggregated July 2016 IDC_2077

2 category of business intelligence (BI)/analytics tools, analytic data management and integration platform, and spatial information analytics tools (7%). In 2015, Oracle continued as the largest business analytics software vendor with 16.4% share. It was followed by SAP, IBM, Microsoft, SAS, and Teradata, all with over $1 billion in revenue. Together, these top vendors had 58% market share, down from 63% in Among the top 30 vendors, the fastest growth came from Amazon.com, Cloudera, and Tableau Software. This IDC study highlights the shares of the largest vendors in the worldwide business analytics software market for the calendar year "Demand in this $41.4 billion software market remains healthy," said Dan Vesset, group VP, Analytics and Information Management. "The growth rate was negatively affected by currency exchange rates and revenue recognition model changes for large vendors. These financial factors mask the continued strong investment by organizations in achieving actionable analytics." BUSINESS ANALYTICS SOFTWARE MARKET SHARE Table 1 displays market share for the worldwide business analytics software market. TABLE 1 Worldwide Business Analytics Software by Vendor, Vendor Growth Growth Oracle 6, , , SAP 5, , , IBM 4, , , Microsoft 3, , , SAS 2, , , Teradata 1, , , Salesforce.com Adobe Tableau Software Informatica Other 12, , , Total 37, , , IDC IDC_2077 2

3 TABLE 1 Worldwide Business Analytics Software by Vendor, Vendor Growth Growth Note: This table does not take into account any mergers and acquisitions that closed after December 31, Source: IDC's Semiannual Business Analytics Software Tracker, May 2016 As described in the Market Definition section of this study, the business analytics software market is comprised of 12 segments. The following sections of this excerpt highlight market performance and vendor shares in the business intelligence and analytic tools segment as well as its advanced and predictive analytics tools sub-segment; the analytic data management and integration platform segment and its analytic data integration software sub-segment; and the analytic and performance management applications segment. BUSINESS INTELLIGENCE AND ANALYTIC TOOLS The worldwide business intelligence (BI) and analytics tools software market is made up of three primary segments: end-user query, reporting, and analysis tools; advanced and predictive analytics tools; and content analytics tools. Within these primary market segments are a range of tools for production reporting, visual discovery, OLAP, statistical model development, testing, and execution. In 2015, the total business intelligence and analytics tools software market grew 3.0% in current currency terms. It's important to highlight that foreign exchange rate changes during 2015 resulted in a significant negative impact on the market when reported in U.S. dollars (USD). In constant currency, the market grew 11.7%. The negative impact of currency exchange rates was more pronounced on vendors that derive a greater portion of their revenue outside of the United States. Among the three primary segments of the market, end-user query, reporting, and analysis software represents a 72% share but it grew at only 0.7% in The advanced and predictive analytics market grew 7.8%, and the content analytics market grew 12.9%. The big story of 2015 was the beginning of "the great migration" to the cloud. In 2015, the on-premises portion of the overall market grew only 1.2% while the public cloud services revenue grew 38.5%. It was the first year that the public cloud revenue was more than 5% of the overall BI and analytics tools market. Note that commentary in this study focuses on the two markets primarily focused on structured data. Content analytics software is discussed in documents available from IDC's cognitive systems and content analytics market research services. This IDC study discusses the top vendors of the worldwide business intelligence and analytics tools software market. In 2015, SAP continued as the largest BI and analytics tools vendor. However, its share declined due to a negative impact to foreign exchange rates and growing competition. SAP was followed in share by Microsoft, SAS, IBM, and Oracle each with over a billion dollars of revenue in 2016 IDC IDC_2077 3

4 this market. The top 5 largest vendors now have 52% of the market, down from 58% in 2013 (and 59% in 2010). The decline in the share of the top 5 largest vendors in this market is due to the continued above-market growth rate of the visual discovery software vendors and a new generation of cloud-only vendors. Table 2 displays market shares for the overall business intelligence and analytics (BIA) tools software market. Table 3 displays market shares for the advanced and predictive analytics tools software market, which is a segment of the BIA Tools market. TABLE 2 Worldwide Business Intelligence and Analytics Tools Software by Vendor, Growth SAP 2, , , Microsoft 1, , , SAS 1, , , IBM 1, , , Oracle 1, , , Tableau Software Qlik MicroStrategy MathWorks Information Builders Palantir TIBCO Panorama Software Subtotal 9, , , Other 3, , , Total 12, , , Note: This table does not take into account any mergers and acquisitions that closed after December 31, Note: In a change from previous years' studies on this market, IDC has begun to track MathWorks as one of the vendors in the advanced and predictive analytics market. Source: IDC's Semiannual Business Analytics Software Tracker, May IDC IDC_2077 4

5 TABLE 3 Worldwide Advanced and Predictive Analytics Software by Vendor, Growth SAS IBM MathWorks Microsoft FICO Alteryx Dell SAP RapidMiner Oracle Pitney Bowes Actian Alpine Data Labs TIBCO Rogue Wave Software Teradata Fujitsu Ayasdi H2O Zementis Subtotal 1, , , Other Total 2, , , Note: This table does not take into account any mergers and acquisitions that closed after December 31, Note: In a change from previous years' studies on this market, IDC has begun to track MathWorks as one of the vendors in the advanced and predictive analytics market. Source: IDC's Semiannual Business Analytics Software Tracker, May IDC IDC_2077 5

6 The following vendors shaped the business intelligence and analytics market growth in 2015: SAS continued as the leader in the advanced and predictive analytics market. Despite the onslaught of competition from start-ups, open source tools, and some established vendors, SAS continued to dominate this market with about a 32% share. Part of its continued success is in the breadth of functionality and software performance, but part of it is also attributable to the SAS business model that has always relied first and foremost on the subscription pricing model. Thus the company is unaffected by change in the revenue recognition model because of the ongoing migration from on-premises to cloud services. Microsoft is having a significant impact in broadening the advanced and predictive analytics market. Its focus on supporting the R community as well as its Azure analytics services can benefit from the company's massive partner network. The vendor with the highest growth rate in the advanced and predictive analytics market was RapidMiner. Although still small in terms of total software revenue, its blend of commercial and open source software and focus on both data scientists and business analyst may help maintain a high growth rate for this vendor. In the query, reporting, and analysis segment of the market, the big story is the decrease in 2015 revenue for SAP, IBM, and Oracle. Part of the decrease can be explained by foreign exchange exposure and the shift in the revenue recognition model, but part of it also due to competitive pressure from visual discovery vendors and lower-priced products from Microsoft, Amazon, and Salesforce. Another impact, especially on SAP, IBM and Oracle, has resulted from the growth of embedding BI and analytics functionality in various enterprise applications as well as in other application development and deployment and systems software products, which increases their value but diminishes the opportunity to sell standalone BI and analytics software. In aggregate, these forces caused SAP, IBM, and Oracle to stumble in New product such as cloud business analytics solutions from all three vendors and IBM Watson Analytics may begin to counter the effect. Tableau Software continued strong with above-market growth rate in the market. However, it also has begun to experience more competition and some growing pains that impact software vendors going through the $500 million level of revenue. Overall, the evolution of the end-user query, reporting, and analysis market presents many positives for end users looking to either expand or upgrade their software investments IDC IDC_2077 6

7 ANALYTIC DATA MANAGEMENT AND INTEGRATION PLATFORM SOFTWARE The worldwide analytic data management and integration platform software market forms the founding for most business analytics solutions. This market is composed of two primary segments: analytic data management and analytic data integration. In the past, IDC has referred to these market segments as the data warehouse management and data warehouse generation software market segments. Because of the strong association of data warehouses with only relational database technology and growth in the adoption of non-relational data management technologies for business analytics uses, we have introduced a name change for the market as well as additional segmentation that shows the individual growth rates for relational and non-relational data management software. In 2015, the total analytic data management and integration platform software grew 3.3% in current currency terms. It's important to highlight that foreign exchange rate changes during 2015 resulted in a significant negative impact on the market when reported in U.S. dollars. In constant currency, the market grew 11.3%. The negative impact of currency exchange rates was more pronounced on vendors that derive a greater portion of their revenue outside of the United States. Among the two primary segments of the market, analytic data management software represents a 76% share but grew at only about half the growth rate of analytic data integration software. However, regardless of market segments, the big story of 2015 was the beginning of "the great migration" to the cloud. In 2015, the on-premises portion of the overall market remained flat, while public cloud services revenue grew 89%. In 2015, Oracle continued as the largest analytic data management and integration platform software vendor. As in many of the previous years, Oracle was followed by Microsoft, IBM, SAP, and Teradata. Combined, these top 5 vendors by revenue accounted for 76% market share. This excerpt shows the vendors shares for the analytic data integration software market segment only. TABLE 4 Worldwide Analytic Data Integration Software by Vendor, Vendor Growth Growth Informatica SAS IBM Microsoft SAP Oracle Syncsort IDC IDC_2077 7

8 TABLE 4 Worldwide Analytic Data Integration Software by Vendor, Vendor Growth Growth Talend Pitney Bowes Information Builders Subtotal 2, , , Other Total 2, , , Note: This table does not take into account any mergers and acquisitions that closed after December 31, Source: IDC's Semiannual Business Analytics Software Tracker, May 2016 ANALYTIC AND PERFORMANCE MANAGEMENT APPLICATIONS SOFTWARE The worldwide analytic and performance management applications software market currently comprises six primary segments: financial performance and strategy management, services operations analytic, supply chain and product-centric analytic, workforce analytic, customer relationship analytic, and production planning. In 2015, the total analytic and performance management applications software grew 1.4% in current currency terms. It's important to highlight that foreign exchange rate changes during 2015 resulted in a significant negative impact on the market when reported in U.S. dollars. In constant currency, the market grew 9.3%. The negative impact of currency exchange rates was more pronounced on vendors that derive a greater portion of their revenue outside of the United States. Among the segments of the market, in 2015 customer relationship analytic applications had the highest growth, with 8%, while the production planning segment grew the least, with -3.1%. The public cloud portion of the market grew 18.8%, while the combined market growth for all other deployment methods was -7.6%. In the overall analytic and performance management applications software market in 2015, SAP was the largest vendor, with 17.7% share, followed by Oracle, with 15.2% share. Both these vendors' revenue declined in this market in Among the top vendors, those showing best growth in 2015 are in the customer relationship analytic applications market and include salesforce.com, Adobe, and Webtrends. The analytic and performance management applications software market includes major enterprise applications vendors and a very large number of specialists with business process and/or industry expertise. It is a highly fragmented market with discrete trends within each segment. This study is 2016 IDC IDC_2077 8

9 meant to highlight the shares of the largest vendors without a detailed discussion of trends within each segment, which is available from other IDC research services and deliverables. This IDC Excerpt highlights the shares of the largest vendors in the worldwide analytic and performance management applications software market for the calendar year The worldwide analytic and performance management applications software market grew 1.4% in Table 5 displays worldwide revenue and 2015 growth and market share for this market. TABLE 5 Worldwide Analytic and Performance Management Applications Software by Vendor, Growth Vendor SAP 2, , , Oracle 2, , , IBM SAS Salesforce.com Adobe Infor FICO JDA Software Webtrends Subtotal 8, , , Other 4, , , Total 12, , , Note: This table does not take into account any mergers and acquisitions that closed after December 31, Source: IDC's Semiannual Business Analytics Software Tracker, May 2016 MARKET DEFINITION IDC defines the business analytics software market as an aggregation of several software tools and application markets with the functionality to aggregate, manage, organize, analyze, access, and deliver structured and unstructured data. As shown in Figure 1, the business analytics software market has three primary segments: analytic and performance management applications, business intelligence and analytics tools, and analytic 2016 IDC IDC_2077 9

10 data management and integration platform software. Each of the primary segments has subsegments as follows: Business intelligence and analytics tools. These software tools include query, reporting, and analysis tools; advanced analytics tools; and content analytics tools. Spatial information analytics tools. These software tools conduct spatial or location analytics. Analytic data management and integration platform software. IDC defines data warehousing as a process that organizes time-based data coming from multiple sources according to subjects meaningful to the business and driven by the need to inform decision makers. The data warehouse platform segment includes two market subsegments: Analytic data integration. These software tools are software used in the design, cleansing, transformation, loading, and administration of the data warehouse. Analytic data management. These software tools are database management software used to manage data in the data warehouse. IDC further segments this market into relational data warehouses and non-relational data stores. Analytic and performance management applications. IDC defines these applications as software that must meet each of the following three conditions: Business process support. Commercial application software that structures and automates a group of tasks pertaining to the review and optimization of business operations (i.e., control) or the discovery and development of new business (i.e., opportunity) Separation of function. Can function independently of an organization's core transactional applications yet can be dependent on such applications for data and may send results back to these applications Time-oriented, integrated data from multiple sources. Extracts, transforms, and integrates data from multiple sources (internal or external to the business) supporting a time-based dimension for analysis of past and future trends or accesses such a database IDC tracks the following analytic and performance management applications subsegments: Customer relationship analytic applications Supply chain and product analytic applications Services operations analytic applications Workforce analytic applications In addition, IDC classifies two functional markets as being part of the analytic and performance management applications market. These markets are: Financial performance and strategy management applications Production planning analytic applications 2016 IDC IDC_

11 FIGURE 1 IDC's Business Analytics Software Taxonomy Source: IDC, June IDC IDC_

12 About IDC 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 helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world s leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-insights-community.com 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 2016 IDC. Reproduction is forbidden unless authorized. All rights reserved.