The promised land of analytics and BI has emerged into market reality, according to Rita Sallam, Research Vice President at Gartner, who reveals encouraging market insights that provide context for channel players wanting to understand the demand drivers.
Following the highly optimistic predictions for BI and analytics software in recent years, the prospect comes into view that sky high forecasts may be true after all, with Gartner confirming that the value of the global market for BI and analytics will balloon to $18.3 billion in 2017, an increase of 7.3 per cent on 2016. Even better, the market is forecast to grow to $22.8 billion by the end of 2020. According to Gartner's assessment of the market, this is the age of ‘modern' BI and analytics, with modernisation fuelling a rampant surge in demand that will outstrip the overall market, offsetting declines in traditional BI spending.
Sallam's references to BI and analytics are qualified by the prefix ‘modern', signifying a break from previous technologies now deemed to be irrelevant. "The modern BI and analytics platform emerged in the last few years to meet new organisational requirements for accessibility, agility and deeper analytical insight, shifting the market from IT-led, system-of-record reporting to business-led, agile analytics including self-service," said Sallam.
As the analytics revolution starts to settle down, the market is expected to decelerate from 63.6 per cent growth in 2015 to a projected 19 per cent by 2020. Gartner believes this slowing effect is a reflection of data and analytics becoming mainstream. The market is growing in terms of seat expansion, but revenue will be dampened by pricing pressure, pointed out Sallam.
"Purchasing decisions continue to be influenced heavily by business executives and users who want more agility and the option for small personal and departmental deployments to prove success," she added. "Enterprise-friendly buying models have become more critical to successful deployments."
Gartner has identified the factors it believes are driving demand for modern BI and analytics. "While business users initially flocked to new modern tools because they could be used without IT assistance, the increased need for governance will serve as the catalyst for renewed IT engagement," noted Sallam. "Modern BI tools that support greater accessibility, agility and analytical insight at the enterprise level will dominate new purchases."
Vendors will also drive the next wave of market disruption, reckons Sallam. "The emergence of smart data discovery capabilities, machine learning and automation of the entire analytics workflow will drive a new flurry of buying, prompted by its potential value to reduce time to insights from advanced analytics and deliver them to a broader set of people across the enterprise," she added. "While this ‘smart' wave is being driven by new innovative start-ups, traditional BI vendors that were slow to adjust to the current ‘modern' wave are driving it in some cases."
Meanwhile, the need for complex datasets is driving investments in data preparation. Today, business users want to analyse diverse, often large and more complex combinations of data sources and data models, faster than ever before. And the ability to rapidly prepare, clean, enrich and find trusted datasets in a more automated way becomes an important enabler of expanded use, according to Gartner.
"Extensibility and embeddability will also be key drivers of expanded use and value," emphasised Sallam. "Both internal users and customers will either use more automated tools or embed analytics in the applications they use in their context - or a combination of both. The ability to embed and extend analytics content will be a key enabler of more pervasive adoption and value from analytics."
Support for real-time events and streaming data will be another driver, as organisations increasingly leverage streaming data generated by devices, sensors and people to make faster decisions. "Vendors need to invest in similar capabilities to offer buyers a single platform that combines real-time events and streaming data with other types of source data," commented Sallam.
Cloud deployments of BI and analytics platforms have the potential to reduce the cost of ownership and speed up the time to deployment. However, data gravity that still tilts to the majority of enterprise data residing on-premises continues to be a major inhibitor to adoption. But this reticence is abating and Gartner expects the majority of new licensing buying to be for cloud deployments by 2020.
"Marketplaces will create new opportunities for organisations to buy and sell analytic capabilities and speed time to insight," explained Sallam. "The availability of an active marketplace where buyers and sellers converge to exchange analytic applications, aggregated data sources, custom visualisations and algorithms is likely to generate increased interest in the BI and analytics space and fuel its future growth.
"Organisations will benefit from the new and innovative vendors continuing to emerge, as well as significant investment in innovation from large vendors and venture capital funded start-ups. They do, however, need to be careful to limit their technical debt that can occur when multiple stand alone solutions that demonstrate business value quickly turn into production deployments without adequate attention to design, implementation and support."