Worldwide Business Analytics Software Forecast and 2013 Vendor Shares

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1 Market Analysis Worldwide Business Analytics Software Forecast and 2013 Vendor Shares Dan Vesset David Schubmehl Mary Wardley Brian McDonough Alys Woodward Carl W. Olofson Pages 1-9 Worldwide Advanced and Predictive Analytics Software Forecast and 2013 Vendor Shares Alys Woodward Pages IN THIS EXCERPT The content for this excerpt was taken directly from 2 recent IDC Market Analysis reports; IDC Worldwide Business Analytics Software Forecast and 2013 Vendor Shares (Doc # ). Included in this excerpt: IDC Opinion, In this Study, Situation Overview and Future Outlook. Also included are Figure 1 and Table 1, 2, 5 and 11. Worldwide Advanced and Predictive Analytics Software Forecast and 2013 Vendor Shares (Doc # ) Included in this excerpt: IDC Opinion, In this Study, Situation Overview, Future Outlook. Also included are Table 1 and 2. IDC OPINION In 2013, the worldwide business analytics software market grew 8.2% to reach $37.7 billion. The market is now forecast to grow at a 9.4% compound annual growth rate (CAGR) through For over a decade, IDC has defined the business analytics software market as the combination of the data warehouse (DW) platform software with performance management and analytic applications and business intelligence (BI) and analytic tools. Key observations about the business analytics software market include: 2013 market growth rate of 8.2% was essentially unchanged from the 8.6% growth rate in The overall market is in a period of steady growth, but there is variability in the expected growth rates of the individual market segments. July 2014, IDC #249926

2 In 2013, the market experienced a noticeable shift toward cloud-based solutions. Although these cloud-based solutions had been available for years, supply of cloud services from the largest vendors accelerated rapidly in 2013 and is expected to continue throughout the forecast period Increasingly, the distinction between business analytics and big data is blurring, and the hype about the latter phenomenon has subsided. As a result, more organizations are looking to develop comprehensive business analytics strategies that address all of their data access, analysis, and management requirements. There is a broad theme of "self-service" in the business analytics market that applies to all user groups. This trend is putting increasing pressure on IT departments to address end-user requirements faster and yet without increasing IT resources. Methods used by IT to address this demand include relying more on cloud services, outsourcing, consulting services, and technology automation, including appliances. At the same time, IDC estimates that about 60% of IT project funding is now controlled or significantly influenced by business units. This has resulted in many more "shadow" IT and analytics efforts to support analytics and business intelligence needs of end users. It is part of the reason for the rapid growth of the visual discovery subsegment of the end-user query, reporting and analysis segment of the business analytics market. IN THIS STUDY This study examines the business analytics software market for the period from 2009 to 2018, with vendor revenue trends and market growth forecasts. Worldwide market sizing is provided for 2013, with trends from A five-year growth forecast for this market is shown for Revenue and market share of the leading vendors are provided for 2013, with trends from Business Analytics Software 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: performance management and analytic applications, business intelligence and analytic tools, and data warehouse platform software. Each of the primary segments has subsegments as follows: Business intelligence and analytic tools. Business intelligence and analytic tools include query, reporting, and analysis tools; advanced and predictive analytics tools; spatial information analytics tools; and content analysis tools. Query, reporting, and analysis tools include ad hoc query and multidimensional analysis tools as well as dashboards, data visualization, 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 server- and client-side analysis tools that provide a data

3 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 and predictive analytics tools include data mining and statistical software. It uses a range of techniques to create, test, and executive statistical models. Techniques used include machine learning, regression, neural networks, rule induction, and clustering, among others. Advanced and predictive analytics are used to discover relationships in data and make predictions that are hidden, not apparent, or too complex to be extracted using query, reporting, and multidimensional analysis software. Products on the market vary in scope. Some include their own programming language and algorithms for building models. Other products include scoring engines and model management features that can execute models built using proprietary or open source modeling languages. Both of these market segments include both standalone and embedded software, which is defined as follows: Standalone BI software refers to tools that are packaged and marketed under separate products and are accounted for within the IDC functional markets of end-user query, reporting, and analysis and advanced analytics. Embedded BI software refers to tools that are components of other software, specifically relational database management software or application server software. These products are not priced separate of the software into which they are embedded. Examples include Microsoft SQL Server Analysis Services embedded within Microsoft SQL Server, Oracle Reports embedded within Oracle Application Server, and IBM InfoSphere Warehouse Data Mining embedded within IBM InfoSphere Warehouse. Spatial analytics tools (also called geographic information system [GIS]) include tools for data entry/conversion (surveying/cogo, aerial photo rectification, remote sensing, GPS, and others), mapping/spatial query, and business analysis. Only the application of SIM software for business analytics purposes is considered in this study. Content analytics tools analyze range of unstructured information. The technology components in this market include tools for text (often in multiple languages) and rich media (such as audio, video, and image) tagging, searching, machine learning, categorization, clustering, question answering, visualization, filtering, alerting, and information navigation. This market also includes unified information access and cognitive systems platforms that incorporate a wide range of the previously mentioned components. Data warehousing 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 software competitive market includes two market segments: Data warehouse generation. These software tools are software used in the design, cleansing, transformation, loading, and administration of the data warehouse. Data warehouse management. These software tools are database management software used to manage data in the data warehouse.

4 Performance management and analytic 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 FIGURE 1 IDC's Business Analytics Software Market Taxonomy, 2014 Source: IDC, 2014

5 Exclusions IDC's current definition of business analytics software excludes tools for managing real-time, streaming data or what is sometimes referred to as "data in motion." These tools include but are not limited to rules engines, complex event processing engines, streaming data analytics, and business process automation suites and are covered in other IDC reports. SITUATION OVERVIEW The Business Analytics Software Market in 2013 In 2013, the worldwide business analytics software market grew 8.2% to reach $37.7 billion. Of the three primary segments of the market, the business intelligence and analytics tools segment grew, at 8.6%, reversing the trend of the previous two years when the data warehousing platform segment had the leading growth rate. In fact, in 2013, the data warehousing market grew only 6.4%, the worst performance since the recession of The analytic applications segment grew 9.4% in Performance of Leading Vendors in 2013 Table 1 displays worldwide revenue and market share and 2012 and 2013 growth rates for leading business analytics software vendors. Although Table 1 aggregates the 12 related segments of the business analytics market to show overall market leaders, it is important to note the distinct competitive dynamics and vendor shares within each of these market segments. Of the top 20 business analytics software vendors worldwide, Oracle was the largest, with $6.7 billion and 18% share, followed by SAP, IBM, and Microsoft. Among the top 10 vendors only two, SAS and Teradata, can be considered business analytics "pure-play" vendors, and they are in fifth and sixth position, respectively, in market share. The top 10 vendors accounted for 68.5% share of the total market in IDC #

6 TABLE 1 Worldwide Business Analytics Software Revenue by Leading Vendor, Revenue ($M) Share (%) Growth (%) Oracle 6, , , SAP 4, , , IBM 4, , , Microsoft 2, , , SAS 2, , , Teradata , , Salesforce.com Informatica Adobe Infor OTHER 9, , , Total 32, , , Note: This table does not take into account any mergers and acquisitions that closed after December 31, 2013 Source: IDC's Semiannual Business Analytics Software Tracker, June Other consists of: MicroStrategy, QlikTech, FICO, ESRI, Tableau Software, Information Builders, TIBCO, JDA Software, Autodesk, Epicor Software plus others. Business Analytics Software Market Performance by Segment The business analytics software market is made up of three primary segments: business intelligence and analytics tools, performance management and analytics applications, and data warehouse platform. Each of these segments is made up of additional subsegments (refer to Table 5; for a graphical representation of subsegments, refer back to Figure 1). Business Intelligence and Analytic Tools This market segment is made up of software tools focused on such functions as production report development, dashboarding, visual discovery, advanced and predictive model development, model execution, multidimensional analysis, content analytics, and spatial information analytics IDC #

7 In 2013, SAP retained its leadership position of this market segment, with 17% share, despite growing less than the market average. Of the top 7 vendors, Tableau Software grew the fastest, with 84% in 2013, and now has 1.7% of the market. It's quite rare to see vendor ranking changes in this market, expect in cases of major acquisitions, however, Tableau seems poised to overtake MicroStrategy as the sixth largest business intelligence and analytic tools vendor in 2014 (see Table 2). Performance Management and Analytic Applications This market segment is made up of business function and industry-specific prepackaged applications that provide decision support and automation. SAP was also the largest vendor in this segment, with 19.7% market share and 9.5% growth. Oracle was the second largest vendor, with 15.9% share. These top 2 vendors have over a third of market share, and the top 4 vendor, which also include IBM and SAS, have 49% market share. Like the BI and analytic tools market segment, this market segment is characterized by a "long tail" of small and midsize vendors with highly specialized software (see Table 3). Data Warehouse Platform This market segment is made up of two primary segments: data warehouse generation and data warehouse management. Not that the software in this market is not limited to relational database systems despite the common association of data warehousing with such databases. IDC views data warehousing as a process that can be accomplished using a variety of databases and data management frameworks. Oracle continuing its long-standing leadership of this market with 31% share and 4% growth in It was followed by IBM, Microsoft, and Teradata the perennial data warehousing market leaders. However, of the top 5 vendors, SAP has shown the greatest growth in recent years and now has 7.5% of the data warehouse platform market. Two vendors that currently hold small market share but exhibited tremendous growth in 2013 are Amazon and EMC. Both are benefiting from greater demand in cloud-based data warehousing (see Table 4) IDC #

8 Table 2 Worldwide Business Intelligence and Analytics Tools Software Revenue by Leading Vendor, Revenue ($M) Share (%) Growth (%) SAP 2, , , IBM 1, , , Microsoft , , SAS 1, , , Oracle 1, , , MicroStrategy QlikTech ESRI Tableau Software Information Builders Other 3, , , Total 11, , , For vendor shares of the advanced and predictive analytics tools market, see Worldwide Advanced and Predictive Analytics Software Forecast and 2013 Vendor Shares (IDC #249054, June 2014). The content analytics market is covered in greater detail in Worldwide Search and Content Analytics Software Market Forecast and 2013 Vendor Shares (IDC #248830, June 2014). This table does not take into account any mergers and acquisitions that closed after December 31, Source: IDC's Semiannual Business Analytics Software Tracker, June 2014 FUTURE OUTLOOK Forecast and Assumptions Given current demand and supply trends as well as the prevailing and expected economic trends, IDC maintained the forecast five-year CAGR of the business analytics market at just over 9%. Worldwide Business Analytics Software Market Forecast, IDC's forecast growth for the business analytics software market through 2018 is presented in Table 5. The CAGR for the worldwide market through this five-year period is expected to be 9.4%. However, the CAGRs of individual segments of the market vary from 5.5% for services operations analytic applications to 16.9% for content analytics tools IDC #

9 TABLE 5 Worldwide Business Analytics Software Revenue by Segment, ($M) (Business Intelligence and Analytics Tools) CAGR (%) Business intelligence and analytics tools Advanced and predictive analytics 1, , , , , , , , , , Query, reporting, and analysis 6, , , , , , , , , , Spatial information analytics , , , Content analytics , , , , , Subtotal 8, , , , , , , , , , Data warehousing platform Data warehouse generation 1, , , , , , , , , , Data warehouse management 5, , , , , , , , , , Subtotal 7, , , , , , , , , , IDC #

10 Table 11 Worldwide Data Warehouse Generation Software Revenue by Leading Vendor, Revenue ($M) Share (%) Growth (%) Informatica SAS IBM Microsoft SAP Oracle Talend Pitney Bowes Software Information Builders Versata 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, June 2014 Synopsis This IDC study examines vendor revenue performance in the business analytics software market for years and presents a forecast of the market, including its 12 segments, for "The business analytics software market is expanding. The "one size fit all" strategy of the past has been replaced with a focus on workload-specific optimization to help drive maximum value out of the broad range of business analytics software offerings," said Dan Vesset, program vice president for IDC's Business Analytics Solutions. "IDC expects the business analytics software market to grow at a 9.4% CAGR over the next five years." 2014 IDC #

11 MARKET ANALYSIS Worldwide Advanced and Predictive Analytics Software Forecast and 2013 Vendor Shares Alys Woodward IDC OPINION 2013 saw strong positive growth for the advanced and predictive analytics (APA) software market, outpacing IDC's prior forecast by 0.9%. The ongoing market interest in Big Data is leading organizations to embrace all kinds of business intelligence (BI) and analytics, and this is driving uptake of APA software. Additionally, the vendor landscape is expanding, with solutions evolving that use new parallelized architectures to integrate high-volume and high-velocity data and applications that bring APA results to new business processes. Specific highlights of the APA software market include: Worldwide revenue for the APA software market was $2.2 billion in 2013, representing growth of 9.4%, up significantly from the previous year's growth of 6.4%. The top 3 vendors in 2013 based on worldwide revenue were SAS, IBM, and Microsoft, accounting for 55.5% of the market total. IDC forecasts that the APA software market will have a CAGR of 9.9% for the five-year period ending in IN THIS STUDY This study examines the worldwide advanced and predictive analytics software market for the period from 2009 to 2018, with vendor revenue trends and market growth forecasts. Worldwide market sizing is provided for 2013, with trends from A five-year growth forecast for this market is shown for Revenue and market share of the leading vendors are provided for Advanced and Predictive Analytics Software Definition Advanced and predictive analytics software includes data mining and statistical software. It uses a range of techniques to create, test, and executive statistical models. Techniques used include machine learning, regression, neural networks, rule induction, and clustering, among others. Advanced and predictive analytics are used to discover relationships in data and make predictions that are hidden, not apparent, or too complex to be extracted using query, reporting, and multidimensional analysis software. Products on the market vary in scope. Some include their own programming language and algorithms for building models. Other products include scoring engines and model management features that can execute models built using proprietary or open source modeling languages IDC #

12 SITUATION OVERVIEW The Worldwide Advanced and Predictive Analytics Software Market in 2013 The APA software market is in a state of flux; some industries, organizations, and business processes are highly mature in their use of the technology. Others have not embraced it because of the lack of available data, a lack of analytic culture, or a lack of analytic talent. This is changing with the rise of the 3rd Platform how IDC refers to the ICT landscape of the future built upon four pillars of transformation, namely cloud, social business, big data and analytics, and mobility. With the emergence of the 3rd Platform comes a push to expand the user base of APA software through the availability of: Prepackaged on-premise or cloud-based analytic applications that incorporate APA components Simplified APA tools that provide less flexibility than standalone statistical modeling tools but have graphical user interfaces and other easy-to-use features accessible to many more business analysts or even line-of-business users. Significant M&A activity took place in 2013 and the first half of 2014, and we expect this to continue through the next 18 months. Some of these acquisitions were vendors already present in the APA software market, adding to their portfolios: SAP acquired KXEN in September 2013, forming the basis of SAP's InfiniteInsight offerings to add to its Predictive Analytics solution, and FICO acquired InfoCentricity in March Other acquisitions represented market entry as part of an overall Big Data strategy: Dell acquired StatSoft in March Table 1 displays worldwide revenue and 2013 growth and market share for the top 10 advanced and predictive analytics software vendors by revenue in IDC's vendor share tables present leading vendors with IDC revenue estimates. IDC tracks a large number of other APA vendors but may not always have the same level of confidence in their revenue figures to include them in vendor share tables. Instead, an aggregated market estimate is provided for "other" vendors in the market. Other APA vendors tracked by IDC include but are not limited to 11AntsAnalytics, Alpine Data Labs, Angoss, Applied Predictive Technologies, Ayasdi, Blue Yonder, Dell (StatSoft), Featurespace, Fractal Analytics, Fuzzy Logix, Mathworks (MATLAB), Medio, Minitab, Mu Sigma, Oxdata, Predixion Software, Prognoz, RapidMiner, Revolution Analytics, Skytree, Stata, Tresata, Warwick Analytics, Wise.io, Wolfram Research (Mathematica), and Zementis IDC #

13 TABLE 1 Worldwide Advanced and Predictive Analytics Software Revenue by Top 10 Vendor, ($M) Share (%) SAS IBM Microsoft FICO SAP Subtotal 1, , , Other Total 1, , , Growth (%) Source: IDC, May 2014 FUTURE OUTLOOK Forecast and Assumptions Worldwide Advanced and Predictive Analytics Software Forecast, IDC's estimate of the growth of the APA software market through 2018 is presented in Table 2. There is a modest increase to the five-year CAGR due to better-than-expected growth coming in 2014 and an upwardly revised forecast in TABLE 2 Worldwide Advanced and Predictive Analytics Software Revenue, ($M) CAGR (%) Revenue 2, , , , , , Note: See Table 3 for top 3 assumptions and Table 4 for key forecast assumptions. Source: IDC, May IDC #

14 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 2014 IDC. Reproduction is forbidden unless authorized. All rights reserved IDC #