serving 2 types of customers to drive growth: insights from tbr’s bi software vend

TBR

T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

Serving 2 types of customers to drive growth

Insights from TBR’s Business Intelligence Software Vendor Benchmark Technology Business Research Quarterly Webinar Series

Oct. 8, 2014

TBR

2 TBR Quarterly Webinar Series| 10.8.14 | www.tbri.com | ©2014 Technology Business Research Inc.

Insights from TBR’s 2Q14 Business Intelligence (BI) Software Vendor Benchmark: Presenters

Matt Healey Principal Analyst Email: [email protected] Twitter: @Mhealey_TBR

Elizabeth Hedstrom Henlin Senior Analyst, Software and Applications Email: [email protected] Twitter: @EAHHTBR

mailto:[email protected]


TBR


TBR delivers actionable intelligence on the maturing BI market to help clients bridge the gap between buyer aspirations and vendor actions

Note: Software vendors under consideration for 2014 report launches include Tableau Software, Splunk and QlikTech. TBR publishes a semiannual report on SAS Institute in the second and fourth calendar quarters.

Insights from TBR’s 2Q14 BI Software Vendor Benchmark: Program Overview

Business Intelligence Software Vendor Benchmark

Business Intelligence Professional Services Vendor Benchmark

Business Intelligence Addressable Market Forecast

Business Intelligence Software Customer Research

Business Intelligence Professional Services Customer

Research

TBR


Insights from TBR’s 2Q14 BI Software Vendor Benchmark: Overview

TBR evaluates the business intelligence (BI) software market across 4 key segments and across a main model of delivery

Note: Business Intelligence and Analytics Engineered Systems is discussed in this benchmark as an accretive revenue model and delivery component, reflecting some contributions from all four software segments.

Integrated solutions encompassing multiple points of BI functionality in a single product

Point products addressing single- or dual-purpose deployments of BI functionality

Data warehousing and related information management products deployed in support of

business intelligence

Basic BI Tools

Advanced BI Tools

Data Warehousing

Business Intelligence and

Analytics Engineered Systems

BI Applications and Platforms

Delivery method for BI software, inclusive of hardware, software and support revenue

TBR


Analytic Applicationsand Platforms

BI ApplicationsAnd Platforms

Business Applications(Analytic Components)

Performance Management


Subsegments in TBR’s BI software taxonomy align to buyer maturity and the features they select along their BI purchasing journey TBR BI Software Taxonomy Subsegments

Reporting, Queries,Spreadsheets

Basic BI Tools

Dashboards, Scorecards

Online Analytical Processing(OLAP)

Data Discovery

TBR



Subsegments in TBR’s BI software taxonomy align to buyer maturity and the features they select along their BI purchasing journey (cont.) TBR BI Software Taxonomy Subsegments

Data Mining

Advanced BI Tools Event Processing

Data Visualization

Content Analytics

Predictive Analytics

TBR


Key Takeaways: TBR’s 2Q14 Business Intelligence

Software Vendor Benchmark

TBR


Insights from TBR’s 2Q14 BI Software Vendor Benchmark: Market Outlook

2Q14 BI Software Market Summary

BI software vendors continue to shift investments to engage data-centric IT purchasers and line-of-business (LOB) stakeholders

As customers expand BI software deployments, rather than scaling out significant net-new purchases, vendors that best align with buyers’ portfolio and messaging needs will accelerate revenue growth.

The ability to marry LOB executive concerns to BI software products will create growth across BI software market segments.

Vendors will focus short-term investments on monetizing existing portfolios, with long-term opportunity contingent on current development plans.

TBR


2014 BI Software Market Outlook

TBR




BI software vendors continue to shift investments to engage data-centric IT purchasers and LOB stakeholders




TBR


$8.7 $7.6 $9.8 $7.9 $9.1 $8.0 $9.5

$28.1$31.1

$33.6 $34.5 $36.2 $37.9 $39.6 $41.3

$11.6$9.5

$12.5$10.1

$11.7$10.0

$12.0

$35.1

$38.6

$43.1 $43.8$45.8

$47.7$49.5 $50.4

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Est.4Q14 Est. 2011 2012 2013 2014 Est. 2015 Est. 2016 Est. 2017 Est. 2018 Est.

TBR ESTIMATED BUSINESS INTELLIGENCE SOFTWARE MARKET REVENUE PROJECTIONS AND COVERED VENDORS' REVENUE WITHIN TBR'S BUSINESS INTELLIGENCE SOFTWARE VENDOR BENCHMARK

TBR BI Software Market as covered in TBR's BI Software Vendor Benchmark TBR Market Estimate: Total BI Software

TB

R E

stim

ate

d B

I So

ftw

are

Mar

ket

Re

ven

ue

(in

$ B

illio

ns)

Calendar Quarter / Year

TBR

SOURCE: TBR ESTIMATES AND COMPANY DATA


Portfolio and market consolidation of firms selling advanced BI tools drove near-term revenue growth in 2Q14 and will sustain upticks in 2014 TBR Estimates — BI Software Market

Estimated 2Q14 YTY growth across the landscape: ~24% Estimated 2Q14 YTY growth across covered vendors: ~26%

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TBR


IBM SOFTWARE

DELL SOFTWARE

GOODDATAGOOGLE

QLIKTECH

SAP

SAS

SPLUNK

TABLEAU

TERADATA

HP SOFTWARE

INFORMATION BUILDERS

MICROSTRATEGY

BOARD INTERNATIONALTIBCO

ACTUATE

MICROSOFT

INFORMATICA

PENTAHO

SALIENT

PIVOTAL

DOMO

DATASTAX

MARKLOGIC

BIRST

DATAMEER

-50%

0%

50%

100%

150%

$(25,000) $(5,000) $15,000 $35,000 $55,000 $75,000 $95,000 $115,000

Year

-to

-yea

r O

vera

ll B

I Rev

enu

e G

row

th (

%)

Overall BI Revenue - Absolute Dollar Growth (in $ Thousands)

2Q14 OVERALL BI SOFTWARE REVENUE GROWTH: % REVENUE GROWTH VS. ABSOLUTE DOLLAR GROWTH

TBR

NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES, COMPANY DATA

Average Absolute Overall BI $ Change = $15 million Average Overall BI % Growth Year-to-year = 5%

KAGGLE($511; 182%)

Covered Vendors’ 2Q14 BI Revenue Growth: Percentage and Dollar Growth

Laggards

Leaders

Vendors moving away from the pack in revenue growth rates seized a core narrative that appeals to multiple BI buyer segments

Pure-play vendors including Tableau, Splunk and Google are successfully monetizing segmented approaches to the BI software market, expanding alliances and industry-led use cases to stabilize footprints and create long-term growth opportunities.

Revenue contribution leader IBM’s sustained focus on analytics for broader reinvention will accelerate the company’s monetization of customers around newer offerings such as Watson.

Note: Kaggle is excluded from current averages.


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TBR


BI Software Market Segmentation

TBR








TBR


SAP

ACTUATE

DELL SOFTWARE

GOOGLE

MICROSOFT

ORACLE

QLIKTECH

SALIENT

SAS

IBM SOFTWARE


PIVOTAL

TERADATA

PENTAHO

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

-40% -20% 0% 20% 40% 60% 80% 100%

BI V

end

or

BI S

egm

ent

Rev

enu

e G

row

th Y

ear-

to-y

ear

BI Vendor Operating Margin

BASIC BI TOOLS 2Q14 REVENUE GROWTH AND MARGIN: % BI REVENUE GROWTH YEAR-TO-YEAR VS. BI OPERATING MARGIN

TBR

Average Revenue Growth Year-to-year = 3.8% Average Operating Margin = 16.8%



Basic BI tools software vendors are accelerating revenue growth with tools that integrate seamlessly with customers’ environments

Profit leader Oracle continues to monetize its Endeca acquisition, and TBR projects integration of those assets into broader business applications and Database 12c deployments.

Overall migration away from the axis for vendors in basic BI tools emphasizes the success of these firms in migrating late adopters of BI to initial reporting and dashboarding deployments.

Dell Software’s sustained investments in the Toad portfolio, in both development and customer proof points, will maintain its growth in basic BI tools and position it for profitability by the end of CY15.

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Laggards

Leaders


TBR


SAS

ORACLE

SALIENT

SAP

IBM SOFTWARE

INFORMATICAPIVOTAL

TERADATA

TIBCO PENTAHO


MICROSOFT

-50%

0%

50%

100%

150%

200%

0% 25% 50% 75%

BI V

end

or

BI S

egm

ent

Rev

enu

e G

row

th Y

ear-

to-y

ear

BI Vendor Operating Margin

ADVANCED BI TOOLS 2Q14 REVENUE GROWTH AND MARGIN: % BI REVENUE GROWTH YEAR-TO-YEAR VS. BI OPERATING MARGIN

TBR

Average Revenue Growth Year-to-year = 5.8% Average Operating Margin = 13.4%



Predictive analytics, data mining and data visualization are growth drivers for advanced BI tools vendors, with content analytics leading revenue

Creating clear paths and time lines to value will move customers from considering to using advanced BI tools such as content analytics — an area in TBR’s BI taxonomy that has, in our opinion, the most potential to expand and overlap with cloud offerings

PREPUBLICATION

Laggards

Leaders


Dell Software acquired StatSoft in 1Q14. TBR estimates that Dell Software realized $600,000 in advanced BI tools revenue in 2Q14 as a result of that purchase.

TBR








TBR


GOOGLE

HP SOFTWARE

IBM SOFTWARE

INFORMATICA

MICROSOFT

ORACLE

SAP

TIBCO

Co

vere

d V

end

or

Med

ian

S&

M a

s %

of

Rev

enu

e (3

0%

)

Covered Vendor Median R&D as % of Revenue (15%)

DELL SOFTWARE

GOOGLE

HP SOFTWARE

IBM SOFTWARE

INFORMATICA

MICROSOFT

ORACLE

SAP

TIBCO

Stable percentages of sales and marketing, and research and development relative to revenue emphasize BI as an ongoing priority for vendor growth S&M and R&D as Percentage of Revenue: Enterprise Software Vendors

Informatica is in the right place at the right time where BI is concerned — capitalizing on data management skill sets to rapidly increase brand visibility and portfolio traction in new customer bases.

IBM Software will increase its relative focus on sales and marketing for BI heading into CY15, as the company moves to monetize new “freemium” offerings of its Watson product.

HP Software’s increasing focus on R&D as a relative percentage of BI revenue signals additional offerings on the horizon to companion HAVEn, which TBR notes as one of the pillar offerings that can help HP accelerate its reinvention.

Sales as Rising Priority Monetize BI Business

Innovate and Develop Stable Portfolio

Oracle, Microsoft and SAP are examples of vendors targeting one another to accelerate growth; TBR expects all three to prioritize S&M over R&D in the near term to take mindshare.

4Q13 Position

2Q14 Position


SOURCE: TBR AND COMPANY DATA

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TBR


DATAMEER

DATASTAXDOMO

GOODDATA

HORTONWORKS

MARKLOGIC

PENTAHO

PIVOTAL

QLIKTECH

SAS

SPLUNK

TABLEAU

TERADATA

Co

vere

d V

end

or

Med

ian

S&

M a

s %

of

Rev

enu

e (3

0%

)

Covered Vendor Median R&D as % of Revenue (15%)

ACTUATE

BIRST

BOARD INTERNATIONAL

CLOUDERA

DATAMEER

DATASTAX

DOMO

GOODDATA

HORTONWORKS


MARKLOGIC

MICROSTRATEGY

PENTAHO

PIVOTAL

QLIKTECH

SALIENT

SAS

SPLUNK

TABLEAU

TERADATA

-ACTUATE-BIRST-BOARD INTERNATIONAL-CLOUDERA-MICROSTRATEGY

-INFORMATION BUILDERS-SALIENT

Divergence among pure-play firms, driven by increased R&D investment, indicates future growth for functionality and delivery of BI S&M and R&D as Percentage of Revenue: Pure-play BI Vendors

Sales as Rising Priority Monetize BI Business

Innovate and Develop Stable Portfolio

Firms including MicroStrategy, Board International and SAS are expanding investments on all fronts to capitalize on broader demand from customers and larger demand generation machines inside of multiline competitors including IBM and Oracle.

Teradata’s increased focus on S&M alongside stable R&D spend signals a firm monitoring the SAP-Oracle-IBM-Microsoft “database wars” closely, in the hopes corporate investments will lift everyone in this market.

Sustained investments by Salient and Information Builders indicate both firms are focused on evaluating and monetizing offerings to strengthen margins.


SOURCE: TBR AND COMPANY DATA

PREPUBLICATION

4Q13 Position

2Q14 Position

TBR


BI Software Market Projections

TBR


For vendors with point solutions, the ability to integrate with existing

infrastructure increases customer consideration.

Targeted vendors: Highlight business value of functionality and heterogeneity to raise profile relative to multiline

firms.

Vendors that can put forward multiple BI

buyer-oriented messages will capitalize on customer sentiment and win wallet share across buyer types.

Multiline firms: Embed BI into solutions, renewals

and marketing.

By building BI tools and platforms that readily and

heterogeneously integrate, BI software

vendors can aid customers in doing more

with less.

To disrupt BI software vendor customer relationships, firms can create paths to trust by demonstrating readily integrated products

TBR Projections: 2015 Business Intelligence Software Vendor Landscape

Insights from TBR’s BI Software Vendor Benchmark: Market Projections

TBR


Questions?

TBR


James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166

Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research

Insights from TBR’s BI Software Vendor Benchmark: Contact Information

Matt Healey Principal Analyst Email: [email protected] Twitter: @Mhealey_TBR


https://twitter.com/TBRinc

http://www.slideshare.net/TBR_Market_Insight

http://www.youtube.com/user/TBRIChannel

http://www.linkedin.com/company/technology-business-research






TBR


Syndicated Research Coverage by Vendor Segment

Software Vendor Reports (Software Business Quarterly)

Benchmarks and Market Landscapes (Benchmark XLS data is also available)

• CA Technologies • Dell Software* • HP Software • IBM Software • Microsoft Corp. • Oracle Corp. • Red Hat • SAP AG • SAS* • Symantec • VMware

• Software Vendor Benchmark The benchmark currently covers 29 firms, encompassing software license, maintenance and professional services revenue.

• Business Intelligence Software Vendor Benchmark* The benchmark includes BI business of select Software Business Quarterly vendors and additional pure-play firms (31 firms as of CY2Q14).

TBR Software Practice Syndicated Coverage

*Semiannual publication; **Annual publication

SourceIT — IT Customer Segment Reports Insight and in-depth study results on N. American and large enterprise budgeting, buyers and competitors across workloads

SourceIT Business Applications: • SourceIT Energy and Utilities* • SourceIT FSI* • SourceIT Healthcare* • SourceIT Retail*

SourceIT Consulting and Systems Integration for Business Applications: • SourceIT Energy and Utilities* • SourceIT FSI* • SourceIT Healthcare* • SourceIT Retail*

TBR

T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

About TBR Technology Business Research, Inc. (TBR) is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. To learn how our analysts can address your unique business needs, please visit our website or contact us today.

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