BI Software Is a Commodity Technology - InformationWeek

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4/22/2008
05:32 PM
Seth Grimes
Seth Grimes
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BI Software Is a Commodity Technology

BI Scorecard author and IE blogger Cindi Howson writes that she "gasped" on hearing Jim Davis of SAS talk about the commoditization of BI. Yet I'm with Davis — BI software is a commodity — the technology, that is, and not BI as a whole. That "as a whole" includes extensions wrapped around the commoditized technology core, extensions that build-out common-place core BI into solutions, extensions that adapt the technology — that package it in suite or application or embedded fo

BI Scorecard author and IE blogger Cindi Howson writes that she "gasped" on hearing Jim Davis of SAS talk about the commoditization of BI. Yet I'm with Davis — BI softwareis a commodity — the technology, that is, and not BI as a whole. That "as a whole" includes extensions wrapped around the commoditized technology core, extensions that build-out common-place core BI into solutions, extensions that adapt the technology — that package it in suite or application or embedded form — and link it to information sources and presentation and, nowadays, decision management.

I wrote about BI's information angle in an earlier BI-market appraisal. I didn't bother to take on BI technology as a commodity in that earlier article because the technology's commodity status was almost self-evident to me. But to take it on now, I'll cite what I wrote in a look at database management software. Condensing a bit:

So far as that functional core is concerned, 1) there's broad consensus on definitions, 2) basic interface standards are well established, 3) leading products are interchangeable, 4) vendors compete on extended or niche capabilities, and 5) vendors don't compete on software price. I'd further add that with a commodity there is no barrier to user entry-level adoption and there's similarly only a low entry barrier for a would-be technology provider.

This description fits BI technology. It fits reporting and OLAP and ETL from the leading BI firms. It explains why the innovation is outside these core areas, differentiated by (claiming) improvement on the commodity core.Consider Truviso. The company describes itself as "a leading provider of next-generation business intelligence solutions" and its software as offering "high-performance, ultra-low-latency continuous data analysis." Implicitly: you can't compete on last-generation BI (although I'd claim that conventional BI is just fine for lots of folks).

Not incidentally, Truviso built its software on the PostgreSQL open-source DBMS. The company can do this because of the standardization (per Howard Dresner's comment posted to Cindi's blog article) that underlies commodity technologies. Truviso's ability to leverage open-source software supports my point that for a would-be technology provider, there's only a low entry barrier. The same principle applies for Attivio. The company was able to launch its Active Intelligence Engine (AIE), an information-retrieval platform that unifies access to databases and "unstructured" information, within less than a year of company start up by exploiting open-source tools, Apache Lucene/Solr search and the Mule enterprise service bus (ESB) among them.

Products in a commoditized category are not identical even if they are interchangeable. My wife says she tastes a difference between Coke and Pepsi, but the cola market is nonetheless commoditized. Similarly, reporting, OLAP, and ETL products are not identical but they are nonetheless essentially interchangeable. Extended or niche capabilities and solution packaging, not core BI technologies, differentiate BI solutions. The core BI technologies are commoditized.BI Scorecard author and IE blogger Cindi Howson writes that she "gasped" on hearing Jim Davis of SAS talk about the commoditization of BI. Yet I'm with Davis — BI software is a commodity — the technology, that is, and not BI as a whole. That "as a whole" includes extensions wrapped around the commoditized technology core, extensions that build-out common-place core BI into solutions, extensions that adapt the technology — that package it in suite or application or embedded form — and link it to information sources and presentation and, nowadays, decision management.

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