Gartner's BI Summit Warning: Buyer Beware - InformationWeek

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4/20/2010
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Gartner's BI Summit Warning: Buyer Beware

Megavendor business intelligence stacks and data warehouse appliances are gaining ground, analyst firm says, but watch out for discounts and easy answers.




Gartner Research Director Rita Sallam
(click for image gallery)

For more on business intelligence, see Intelligent Enterprise.

Megavendors IBM, Microsoft, Oracle, and SAP now control two thirds of the business intelligence market and their marketshare is growing, Gartner reported at its Business Intelligence Summit in Las Vegas last week. But even if one-stop shopping has appeal, customers should avoid blindly buying into a single stack and losing their negotiating position, the analyst firm warned.

"We're seeing growing stack-centricity, particularly in IT departments, but you have to be open-minded to the fact that not all vendors can do everything," said Analyst Rita Sallam, striking a theme that ran throughout the three-day event. "You have to prepare an information management infrastructure that can incorporate a portfolio of tools even if you rely heavily on one vendor."

In a cautionary session on "Benefits and Perils of Buying into the Megavendor Stack," Sallam acknowledged that consolidated buying can make sense, particularly for those who already have other elements from the same vendor, such as data integration or enterprise applications. But she urged practitioners to define their BI strategies and needs first, admonishing "choosing a single vendor is not a strategy."

Each megavendor has different functional sweet spots and levels of integration, she said. Most big vendors can now point to all the same feature and functions, so it's up to the buyer to conduct detailed due diligence on the actual fit with specific functional requirements, she said. Recognize, too, that even if you buy into a single stack, additional products and components may be needed from third-party firms, so the single-vendor buying ideal may be illusory.

"We've seen a lot of resilience among the pure-play BI vendors because they are changing the rules of the game," Sallam said. "They are targeting the weaknesses of the larger vendors, particularly in terms of product ease of use, ease of deployment, alternative delivery models and customer focus."

Before standardizing on one vendor, BI buyers should guard against a weak future negotiating position by spelling out protections in initial contracts, Sallam urged. She shared the story of one CIO who was fired for signing what seemed like a sweet, enterprise-wide BI deal.

At least 25,000 of the 30,000 seats licensed went unused. The lessons: don't let discounts tempt you to overbuy, and seek shelfware clauses so you don't end up paying maintenance fees on unused licenses. Lock in initial discounts when negotiating enterprise contracts so those terms apply to future purchases. Also seek caps on maintenance increases and spell out license audit procedures in the contract so usage terms are consistent.

In his session entitled "Will a Data Warehouse Appliance Rescue Your Data Warehouse Environment?", Analyst Donald Feinberg said the short answer is no.

Despite strong interest in these preintegrated hardware/software combinations, Feinberg stressed that appliances can temporarily improve performance but ultimately can't mask poor data or bad data warehouse design. Feinberg also reinforced the buyer-beware theme, urging appliance buyers to insist on a proof-of-concept pilot implementation rather than relying on brochures and testimonials to make final purchase.

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