Australian appetite for business intelligence and analytics software continues to increase, outpacing global investments as the local market approaches a billion-dollar valuation.
Recent Gartner findings report that the local BI and analytics market is forecast to reach $889.1 million in 2017, up 13.4 per cent from last year.
Compared to global projections, worldwide market spend is expected to reach US$18.3 billion during the next 12 months, representing an increase of 7.3 per cent.
By the end of 2020, the global market is forecast to grow to US$22.8 billion.
According to Gartner, modern BI and analytics continues to expand more rapidly than the overall market, which is offsetting declines in traditional BI spending.
“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,” Gartner research vice president, Rita Sallam, said.
The modern BI and analytics market is expected to decelerate, however, from 63.6 per cent growth in 2015 to a projected 19 per cent by 2020.
For Sallam, this reflects data and analytics becoming mainstream.
“The market is growing in terms of seat expansion, but revenue will be dampened by pricing pressure,” Sallam added.
“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.
“Enterprise-friendly buying models have become more critical to successful deployments.”
Changing market dynamics
Currently, Sallam said the evolving modern BI and analytics market is being influenced by a range of dynamics, with modern BI at scale expected to dominate new buying.
“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,” Sallam explained.
“Modern BI tools that support greater accessibility, agility and analytical insight at the enterprise level will dominate new purchases.”
Furthermore, Sallam said new innovative and established vendors will drive the next wave of market disruption.
“The emergence of smart data discovery capabilities, machine learning and automation of the entire analytics workflow will drive a new flurry of buying because of 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 startups, traditional BI vendors that were slow to adjust to the current "modern" wave are driving it in some cases.”
Amidst such change, the need for complex datasets is expected to drive greater investments in data preparation also, both locally and globally.
“Business users want to analyse a diverse, often large and more complex combinations of data sources and data models, faster than ever before,” she added.
“The ability to rapidly prepare, clean, enrich and find trusted datasets in a more automated way becomes an important enabler of expanded use.”
Customer demands
From an end-user perspective, Sallam believes that “extensibility and embeddability” will be key drivers of expanded use and value.
“Both internal users and customers will either use more automated tools or will embed analytics in the applications they use in their context, or a combination of both,” Sallam added.
“The ability to embed and extend analytics content will be a key enabler of more pervasive adoption and value from analytics.”
Furthermore, Sallam said organisations will increasingly leverage streaming data generated by devices, sensors and people to make faster decisions, meaning vendors must invest in similar capabilities to offer buyers a single platform that combines real-time events and streaming data with other types of source data.
Unsurprisingly, interest in cloud deployments will continue to grow also, with deployments of BI and analytics platforms having the potential to reduce cost of ownership and speed 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, according to Sallam.
“That reticence is abating and Gartner expects the majority of new licensing buying likely to be for cloud deployments by 2020,” she added.
In examining the wider industry, Sallam said marketplaces will create new opportunities for organisations to buy and sell analytic capabilities and speed time to insight.
“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,” she explained.
“Organisations will benefit from the many 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 being paid to design, implementation and support.”
