Business Intelligence: The European Perspective
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1 Markets, F. Buytendijk Research Note 5 November 2002 Business Intelligence: The European Perspective When choosing business intelligence products, European users are not that different from North American users; however, the differences are interesting. Core Topic Business Intelligence and Data Warehousing: Business Intelligence Markets, Technologies and Techniques Key Issue How will business intelligence software vendors react to ongoing market shifts and challenges? As shown in "Added Value Beats Technology in BI Buying Decisions," M , enterprises selecting business intelligence (BI) tools focus on functionality, not technology. European users are no different from North American users. However, in Europe, they require different functionality. Table 1 shows expected decision priorities for BI deployments in Table Decision Priorities for BI Deployments Decision Priorities North America Europe Highest Ad hoc queries Support for multiple databases Scalability Ad hoc queries Back-office integration Multidimensional analysis or online analytical processing Portal integration Desktop integration Lowest Advanced analysis Web-based thin client Web-based thin client Portal integration Wireless and mobile Wireless and mobile Source: Gartner Research Nearly 80 percent of organizations surveyed in North America have adopted, and use, BI software. The European countries surveyed lag North America in BI adoption, with only 53 percent using BI. This leads to different decision criteria for BI deployment decisions. European users value support for multiple databases much more than users in North America because European enterprises are less advanced in establishing centralized data warehouses. Organizational diversity and decentralized decision making, traits that European enterprises are often known for, have led to multiple data warehouses, or to a data mart strategy. Consequently, the enterprise may use multiple database Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.
2 management systems. This favors vendors such as Business Objects, Cognos and Crystal Decisions, which have focused on multiple databases, over vendors such as Oracle. Oracle is focusing all its BI effort on its own database, Oracle 9i. Users and IT organizations should weigh the integration benefits against the support of multiple database platforms. To save costs, European users should start planning to consolidate platforms and BI tools, following North America's lead. Online analytical processing (OLAP) is still a hot issue in Europe, much more so than in North America. Again, North America leads Europe, and OLAP has become a more-accepted type of technology. In this sort of situation, Europe typically follows America's lead within two years; therefore, we expect that OLAP adoption will rise. The Gartner Hype Cycle (see "The BI Hype Cycle: Major Innovation Ahead," SPA ) shows that OLAP is on the Plateau of Productivity, so European enterprises should treat OLAP as a safe investment. In both North America and Europe, there is little interest in Webbased thin client and wireless and mobile technology. Webbased thin clients are being treated as a given. Because the latest Web-based versions of leading BI software have finally delivered the promised functionality and usability, this is slowly becoming a realistic attitude. Although these versions may not be fully proven, BI software is perceived to be fully Web-enabled. Although Europe is leading in the mobile technology space, this is not reflected in BI. In North America, the higher availability of mobile devices, such as Research In Motion's BlackBerry (which is now starting to become available in parts of Europe), has not led to a significant adoption of mobile and wireless BI. In general, mobile and wireless BI is better in demonstrations than it is in practice (see "New Technologies, Ideas Will Lift BI, but Not Until 2004," COM ). Apart from very specific applications, enterprises should ignore mobile and wireless BI for the moment. Perhaps the most visible difference between Europe and North America is in portal integration. In North America, it is highly topical; in Europe it is rarely required. Apparently, BI strategies in Europe are not as closely linked to portal strategies as they are in North America. Again, Gartner expects Europe to follow North America in European enterprises should watch how North American organizations deal with integrating BI into portals. BI tools are purchased for different reasons in North America and in Europe. However, requirements and drivers do not vary according to industry or enterprise size. North America is concerned with process improvements (better decisions and 5 November
3 operational efficiency) and Europe is concerned with impact on profit and loss. Enterprises should be aware of regional differences when looking for the most widely used BI tools and vendors. Although vendors withastrongpresenceinnorthamericacanbequiteviable,if they lack a presence in the European market, their quality of support may be affected and system integrators may not be familiar with their products. In North America, Cognos, Business Objects and Oracle have the highest "top-of-mind" awareness that is, vendors spontaneously mentioned by users. Looking specifically to business departments and not IT, Cognos and Business Objects do not come up highest; SAS Institute and Hyperion have a stronger top-of-mind. In Europe, SAP, MicroStrategy, Business Objects and IBM have highest top-of-mind. MicroStrategy is particularly strong in Germany, a country that tends to focus on technical superiority. Business Objects leads in France, where it originates, but does not have a strong position at all in the German market. IBM's status as a top-of-mind vendor is noteworthy, because IBM has a partnering strategy and does not offer its own BI products. Our research clearly shows that there is one area where Europe leads North America: Product penetration within the enterprise, once the software is deployed (see Figure 1 and "Business Intelligence: Strategic Intent/Tactical Deployment," COM ). 5 November
4 Figure 1 BI Penetration Through 2004 Inching Toward Information Democracy Product Penetration in 2002 Product Penetration in % to 24% 21% 66% 5% 48% 25% to 49% Percentage of employees with access to BI 50% to 74% software 8% 13% 28% 39% 14% 28% 15% 20% 75% to 99% 6% 11% 10% 44% 100% 7% 1% 3% 9% North America Europe 0% 20% 40% 60% 80% Percentage of respondents 0% 20% 40% 60% 80% Percentage of respondents Source: Gartner Research Although overall market adoption of BI is lower in Europe, the penetration of BI within enterprises that have adopted it is much higher. In North America, 26 percent of employees in the average enterprise (based on 248 respondents) have access to BI software. In Europe, 43 percent of employees (based on 113 respondents) have access. Furthermore, in 2004, the average North American enterprise expects penetration to increase to only 35 percent of employees. In Europe, 62 percent of employees are expected to access the BI software in Of European respondents, the largest category (39 percent) stated that between 25 percent and 49 percent of employees within the organization have access to their primary BI tool. European enterprises expect a much deeper penetration by 2004, with 44 percent of respondents expecting BI to be available for 75 percent to 99 percent of employees. In contrast, in North America, 66 percent stated that penetration of the user community was between 1 percent and 24 percent, and 48 percent do not expect this to change by Although 5 November
5 European users expect aggressive rollouts, the results might be disappointing. Because adoption of BI is not as high as in North America, enterprises may underestimate the challenges in data acquisition and data quality. Multinationals in particular should ask their European operations to lead the culture shift to "information democracy." Bottom Line: Vendors can often focus too much on North America, but Gartner's research shows that the European focus is different. European enterprises should push vendors to consider European trends. However, European enterprises should study North American trends closely, to anticipate changes. Furthermore, European enterprises should continue to increase penetration of business intelligence (BI) into their enterprises aggressively, because a higher degree of business insight will give competitive advantage over North American enterprises. 5 November
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