Gartner’s Magic Quadrant evolution (I)
The intention of this post is to analyze the evolution of the main BI companies along the last decade and how have they reach a positioning in the industry during this time. To achieve this goal I’ll base this case study on the Gartner “Magic Quadrants”, a de-facto standard yearly report on IT companies’ position and a well-known and valuable source of information.
To establish a context frame, let’s remember that Gartner is a strategic consultancy enterprise specialized in trends, influence and status of the major actors in each of the IT sectors and environments. Gartner publishes yearly a detailed “state of the art” report for the most relevant technologies, followed by a chart that depicts the influence and positioning of top companies in this technology..
I won’t talk about Gartner criteria to choose and to score each solution provider; the final report is always a reference for IT professionals with a wide credit on the community. It helps to make visible the work done by each company, spot its strengths and warn about risks and challengers they can take in the future.
The Magic Quadrant
The Gartner’s “Magic Quadrant” is a two axis representation of the positioning of relevant companies in their markets. These axes stand for:
Completeness of Vision (V): (horizontal) indicates the measure of how a company can deal with all the technologies or processes related to its activity, and whether its vision and portfolio of solutions can cover the customer needs.
Ability to Execute (A): (vertical) this axis shows the company performance applying its vision to the real world.
In this framework and by its own criteria, Gartner defines four zones or quadrants where the selected companies will be placed according its score for each axis. Every quadrant has its own name and defines the positioning on the market as:
Niche Players (-V, -A): Companies very specialized in any of the technologies under study, that address focused problems.
Visionaries (+V, -A): Innovation companies that point to new lines of investigation, trending technologies and new ways of performing, even they don’t have a real power to spread around.
Challengers (-V, +A): Enterprises holding a good technological baggage, able to develop products but with less added value or innovation.
Leaders (+V, +A): Innovators with potential to materialize their projects, well positioned in the market and referents in the sector.
Gartner MQ for BI providers in 2010
In this section I’ll describe the method I used for this analysis, the tools, considerations and assumptions, and finally, the derived conclusions
First consideration on the data I used is that I got them from public internet sources and copyright free. I based this analysis in the graphics of Magic Quadrants for the period 2005 to 2011 obtained just from Google searches on pictures. Unfortunately I couldn’t find any information about the quadrant position for companies in structured format (tables, lists…).
From those charts I spent some time retrieving the coordinates for each provider, with the only help of a ruler and a pencil.
I divided every axis in 10 units, so every pair (vision, ability) is bounded to the interval (-5, +5), with a minor tic of 0.5 units. It is true that the measures obtained by this method are not very precise and that a “transcription” error is very probable, however, precision is not very relevant in this study because the position in every quadrant is always well known and I won’t compare elements one to one, just only trends in a period of time.
To ease the plot on the chart, I made a correction on pairs of values with the same coordinates, adding or subtracting 0.1 units in one of the axes to avoid overlapping. Again I take the assumption that high precision is not essential in this study.
Once I got the data extracted from the charts, I designed a simple data model to hold these data for analysis and implemented it in a SQLServer 2008 Express database. It would have been enough, for a simple analysis, to work just with Excel sheet, but I always prefer to store data in databases. The said model looks like this:
Simple data model to store the MQ values
This is a kind of star-model, useful for multidimensional analysis, where entities are categorized into dimension tables and metrics stored in a fact table and linked by foreign keys to those dimensions.
Analysis dimensions are:
Time in a yearly basis from 2004 to 2011
Provider: provider that has been selected by Gartner for its analysis (Business Objects, SASS, Microstrategy…)
Company: hierarchical level over providers to group enterprises that have been acquired along the time of the study (Microsoft – Proclarity…).
About the metrics available:
“Completeness of vision” value in the (-5,+5) range
“Ability to execute” value in the (-5,+5) range
Magic Quadrant position in the range (1,4) clockwise from down-left
Charting the data
To plot the data I have chosen Excel because I feel comfortable using it and almost everybody knows how it works and can easily understand the terms and processes. From a range of data in the spreadsheet I built up some bubble charts, where is possible to follow the time evolution of the position in the Magic Quadrant along the time of the study. A label on every bubble indicates the year of the measure.
I have also included in every chart a linear regression line for every set. The relation between this line and the dispersion of every dot will help us to have an idea about how every provider manages the relationship between ability and vision.
We have to bear in mind that this regression is not intended to be a precise fit, just a trend line to show if the values of ability and vision have any correlation or not.
In the evolution charts it will be possible to see how every provider follows a path in time related to its capacity of improve in ability or enhance its vision. This statement is based in the assumption that Gartner criteria to choose providers in the BI market have been “steady” along these years.
After observing all the plots, we will see that only in few cases (Actuate, Applix, Board, SAS and SAP) exits a relevant correlation or trend between ability and vision; For SAS and SAP we have the feeling that “when we improve our completeness of vision, we lose ability to execute” in the other three cases it would be “when we improve our completeness of vision, we also improve our ability of execute”
Once we have got the data plotted, is time to analyze the charts for the BI providers; we will see the different evolutions of companies, sometimes from niche players to leaders and sometimes staying in a quadrant along its all history.
The reason why a provider “moves” in the chart depends on how it applies its growing strategy, its investments, new developments of products, etc. A deeper analysis based on real facts and milestones for every company will help to understand the evolution in the chart, but this kind of work is out of the scope of this post.
Basically I consider three categories of providers:
Providers of only BI tools and BI solutions: companies that focus all its activity in any or some of the standard technologies of BI: datawarehouse, OLAP analysis, forecast, data integration and ETL, reporting…
Providers that integrates BI tools with other products: companies that have bound its BI products to other platforms, either by acquisition or integration of other companies or developing a new line of solutions. In this category we find big enterprises as Oracle, SAP, Microsoft or IBM
New actors: providers that appear only in the lasts Gartner reports, most of them are niche players and can be included in the first group, however, I prefer to classify them separately due to the lack of many data points.
Evolution charts (I)
In this first set we can see the evolution in the Magic Quadrant along the time for the providers that focus their products in any of the BI technologies. This specialization determines its position on the chart, most of them are niche players because high values of ability or vision are difficult to achieve for companies that cannot bound its BI solutions to other own products as CRM, databases, ERP, etc.. Remarkable exceptions are Microstrategy and SAS, focused only in BI and located in the leader quadrant most of the time of its history.
On the chart I have plotted also the trend line that fits the data points to depict the relationship between vision and ability. As I stated before, this trend is not intended to be used for forecasting or deep analysis, it is just additional information.
Main facts: Provides solutions for analysis, reporting and dashboards on Open Source technologies
Chart evolution: Has been located in the niche player quadrant since 2006, losing ability and vision in the last two years.
Evolution of Actuate (2006-2011)
Solutions on analysis, reporting, planning and dashboards. Provides data connection to all the standard providers. Its front-end is based in Excel spreadsheets
Started in 2005 as a visionary; from that point it moved backwards to the niche player quadrant where has been located since 2011 without relevant changes in its position.
Evolution of Arcplan (2005-2011)
Provides a complete toolkit of traditional BI products (ETL, analysis, reporting, dashboard, etc) Also has developed a CPM platform (budgent, planning, profitability analysis…) and has especific modules for different business areas
Has been on the charts since2008 to the present moment as a niche player, improving slightly in both axes
Evolution of Board International (2008-2011)
From 2006 to 2011 in a centered position in the chart, has been a leader-visionaire for two years
BI Tools for standard and geographic analysis. Corporate performance management suite and enterprise information management systems that provides consolidated and consistent information. Also very competitive in process integration.
Evolution of Information Builders (2006-2011)
From 2005 most of the time as a visionaire, though its position has been shifting. Lately has imporoved its ability.
Specialists in data analyisis and charting on a solid web client. Its last product offers an interactive dashboard designer based on cloud technologies.
Evolution of Spotfire (2005-2011)
Since 2005 most of the time as a visionaire, along this time has improved in both axes to reach a leader position now a days
- Specialized in data visualization and consolidation in a very friendly manner. Quick learning curve and good performance.
Evolution of Qlick Tech (2005-2011)
A reference since in the industry since 2005, has been the most of the time in the visionary quadrant, improving since 2009 to a leader position. It has lost a bit of vision but earned some ability.
Its current product portfolio includes all the traditional BI tools empowered with the best technological solutions. Speciallized in data analysis and decision help tools, now they cover the “5 BI styles”; scorecards, corporate reporting, OLAP analysis, complex and predictive analysis and real time BI.
Evolution of Microstrategy (2005-2011)
Evolving since 2005 to a leader position. Is the company that has achieved the historic highest score in completeness of vision. Since 2006 stays in the leader quadrant but has been losing vision in the last times.
SAS applies its wide knolwege to every company that has to deal with data analysis, not only enterprises but universities. They have been extending its suite of products to cover not only analytics but global business intelligence solutions; financial intelligence, IT mangement, performanc management, etc.
Evolution of SAS (2005-2011)
Evolution charts (II)
In the next charts I have plotted the time evolution of the four companies that deploy BI solutions linked to other own platforms well positioned in the market. These companies have been acquiring small providers, along these last years, to improve some of its tools that allowed them to win a market quota or to open new product lines.
This strategy has been rewarded because all of them are now located in the leader quadrant and have achieve the status of reference companies in the BI market.
SAP: Bought Business Objects, a well consolidated BI company, a leader in the Magic Quadrant. This acquisition allowed SAP to empower its Business Warehouse for analysis and reporting on the ERP data. The high spreading of SAP products has been the gateway for many customers to use Business Warehouse instead of a third party product.
IBM: Acquired Cognos, a company that has been in the BI market since the 90′s where it was a reference. IBM links the analytic and reporting capabilities of Cognos to installed databases and datawarehouses.
Oracle: Acquired Siebel, a leader company in CRM platforms and Hyperion, a mid-sized company in the BI market with enough ability to empower the Oracle’s BI suite.
Microsoft got the OLAP engine from Panorama Software which became the core of Analysis Services; also acquire Proclarity a visionary in analysis tools.
These companies have incorporated many more mid-sized and small providers, by fusion, acquisitions or partnership, as an example, Microsoft incorporated the Data Allegro in-memory technology to launch Power Pivot, this product is not a big splash but allows Microsoft to start working in a new field that’s is growing in the last times and where it can compete in the future.
The evolution charts for these four main actors are here:
SAP + BO:
SAP acquired BO, a leader in reporting and analyisis in 2008. The company has been in a constant evolution to become a leader in 2008. Even its good score in vision, has lost ability.
SAP bases its growing strategy in the full integration of its BI platform, Business Warehouse, with its widespread ERP. This integration becomes its main force because the big marquet quota that SAP enjoys these days, but limits its expansion to mid and small sized companies that can not afford a big ERP implementation at a high price.
SAP and Business Objects (2005-2011)
Microsoft + Proclarity + Panorama:
Microsoft integrated Panorama’s OLAP engine in 2004 to empower its OLAP solution (Panorama is also a company considered by Gartner and a main partner of Microsoft). Later in 2007 acquired Proclarity a visionary tool for analysis. Proclarity ideas about charting and navigation are present in the 2010 version of Excel. Finally in 2010, Microsoft got the in-memory technology of Datallegro to build the engine of Power Pivot.
Microsoft has a good score in vision and has improved in ability. Its BI suite is sold as a part of its database engine SQLServer so it can spread easily into small and mid-sized companies that uses this database for transactional processes.
The challenge of Microsoft in BI is to enhance the acceptance of its products by the market, and change the perception of a second line provider, behind of Oracle or IBM. Its main force is the widespread of all its platforms and the fact that Excel, its final BI client is used for milions of people daily around the world.
Microsoft, Panorama and Proclarity (2005-2011)
IBM + Cognos + Applix
The main acquisitions by IBM where Applix (niche player in 2007) and Cognos, a leader company in 2009. Those strategic movements allowed IBM to rise in a good position inside the leader quadrant in 2010, with a high score in vision .
IBM integrates the BI solutions with its own RDBMS platforms, allowing its customers to follow the path from data to knwoledge by the hand of the same provider.
IBM, Cognos and Applix (2005-2011)
Oracle + Siebel + Hyperion:
Oracle has also followed the acquisitions strategy; in 2006 got Siebel, a visionary company whose main product is a known CRM platform. In 2007 incorporated Hyperion, also a visionary provider of BI tradicional solutions of analysis and reporting.
- Since 2007 Oracle has been positioned in the leader quadrant with good scores both in ability and vision. As Microsoft and IBM, its BI platform is fully integrated with Oracle main product; the RDBMS widespread in mid-sized and big companies.
Oracle, Siebel and Hyperion (2005-2011)
Evolution charts (III)
In this final chart I have plotted the newcomers to the Magic Quadrant in the last two years. Most of them are companies that can contribute with innovation or a differential value that has made them grown, in sales and in relevance into the market.
All of them start from a position of niche player and in the future we will see how they evolve in ability and vision, moving to the leader quadrant as Microstrategy or SAS did some time ago or remaining as a niche player like Actuate, Arcplan or Board
The new companies on the MQ in the last years
Bitam, Corda, Jasper, LogiXML, Salient, Tableau, Targit… we should remember these names in the future because they are the brand new actors in the business intelligence excellent companies, and for sure they will impact in this market. All of them have started as niche players, developing solutions or tools focused in one of the main BI technologies or specialized on a specific industry. Market acceptance, innovation and the chance to deploy full BI products will draw the path of these companies in the next years.
From the charts depicting the evolution in the Magic Quadrants is possible to extract some conclusions about how companies behave in the market.
First of all, and maybe the most important, is that there are many possible models of growing and evolve.
The idea that first comes to our mind when we analyze the charts is that the golden path of excellence for a company will lead it to the leader quadrant, where ability and vision take its best values. Well, it sounds good, but do really all the providers want to be leaders? Does the market have enough room to host a cluster of leader companies? In my opinion success is not measured in those terms of excellence but in the chance of being present in the chart for years.
We can see that companies as Actuate, Arcplan, Board, etc. can stand its whole life in the quadrants as niche players. The real skill of these providers is to find a place in the market for their products along the time. Maybe their products can not cover all the BI stages or do not innovate as others do, but for sure they have won a place to establish and grow.
On the other hand we can see the enterprise model where a powerful company acquires smaller providers to enhance its own line of products; this is the case of some of the current leaders as IBM, Oracle, Microsoft and SAP. This behavior is not new, but for sure, only big companies with an enormous budget and diversified products can follow this path.
Something relevant also from the charts is that in the last two years a good number of companies have been rising up in the quadrants. In my opinion this fact obeys the simple assessment that the BI market and BI itself as a concept has been spreading around to all kinds of customers and has diversified its proposals.
Today most of companies use BI tools direct or indirectly with new aims and by new kind of users, and not all these companies can afford an SAP deployment or work with huge IBM databases, also they do not perform complex statistical analysis or data mining to need a SAS product. Customers budget and specific needs, pushes the new actors to figure in the niche quadrant.
Finally, I want to mention two companies, Microstrategy and SAS, visionaries and leaders since 2005 and exclusively focused on BI tools. Their strategy is simply to be the best in their main fields by continuous innovation.
These companies are different from niche players because they have a wide experience and a consolidated market position, are different from challengers because its long run know how and experience, and also different from leaders because even its huge vision score they have not the company structure to perform well in all fields.
Finally, I expected to find out from the evolution of companies that ability and vision where related in some way. Is not the case, the correlation between both measures is very poor and irrelevant. As I said before, the regression line only shows the smell of a trend but is not trustable.
What is next
I think that this analysis could have an added value if the data extracted from the MQ is compared against real market data for every company, as gross sales, stock prices or number of licenses. The most of the information available, the better understanding. This will be probably the subject of a future study, maybe when the MQ for 2012 is published.
What about the future? What can we expect from the providers of the BI industry?
In my opinion, and according to studies, there are 4 important BI trends to follow in the next years, and incoming companies will rise or take a place in the chart influenced by them. These future lines are:
Big Data: Corporate datawarehouse are starting to be fed by new sources of data, most of them unusual and far from traditional sources. The social media huge volume of information is everyday more present and has a bigger influence. To access and to process this amount of raw data, new technologies are starting up and will show its accuracy and relevance in the new future; all the data about all the matters.
Empowered analytics: Analytics is not a new concept in business intelligence. Is a fundamental concept in every business and adds value in all the company processes and stages of information flow. The main challenge is going to be the handling of big volumes of information and develop new techniques to process data, beyond statistics or traditional data mining techniques. Clustering, pattern finding, decision trees and all of these useful tools will evolve according to new needs in companies, public administration or even scientific environments; what, how and why in a different flavor.
Real time: The availability of quick answers to dynamic processes continuously fed with new data will be an interesting niche to play in, especially for innovative companies. Real time is half way between traditional off-line analysis and transactional processes and has both pros and cons. Solutions that can perform in speed and accuracy will rise up in the next years; continuous forecast.
Distribution and ubiquity: “BI for the masses”, “BI everywhere”, “Social BI”. The incoming current model of networking in every environment and framework arrives also to BI; knowledge is going to be shared by many channels and will be accessible from everywhere, in every moment and by every single person. Not all of us are going to produce BI contents but for sure we’ll become consumers and distributors of this knowledge; everywhere, at every moment to any user.
Good times for BI, this is the tag line. As a professional in these matters I’m glad to see that there is a bunch of opportunities and challenges for the next future. Let’s see what happens…
Trends for the future of BI; very exciting environments an technologies