CPM and BI: Market Trends Compared & Contrasted

Last week I wrote an article titled CPM and BI: Emerging product segments, vendors, and convergence trends which sparked some interesting comments. This week I have compared and contrasted the BI and CPM vendors and their product sets as detailed in the new Bloor report on the CPM market and the new Bloor report on the BI market. In each of these reports we profiled the vendors that we consider to be the “top” vendors—the market share leaders and the “rising stars”. So who they?

Those that feature in both the BI report and the CPM report are Actuate, Business Objects, Cognos, Hyperion, Microsoft, Oracle, SAP, and SAS. Those that feature only in the BI report are IBM, ICS, Inflection Point, Information Builders, JasperSoft, MicroStrategy, Noetix, Panorama, Pentaho, Qliktech, Spotfire, SSA Global and Temtec (recently acquired by Applix). Those that feature only in the CPM report are ALG, Applix, BoardMIT, Cartesis, Clarity Systems, CODA, Extensity, Longview, OutlookSoft, Pilot Software, Sage, SymphonyRPM and Teradata. Eight enterprise applications vendors are in both BI and CPM markets, and there are 13 best-of-breed vendors in each market.

These 26 best-of-breed vendors need to be careful—Bloor is forecasting that only vendors that straddle both CPM and BI markets offer the potential for long-term sustainable growth in shareholder value as BI markets commoditize. BI is the natural platform for CPM and the two technologies are complementary and should co-exist. In the short term however the best-of-breeds and the enterprise applications vendors will only occasionally step on each others’ toes, and most should achieve reasonable revenue and profits growth, primarily through buoyant maintenance and professional services revenues. The writing is on the wall though—the 12% fall in Q2 2006 year-on-year BI licence revenues for Business Objects and the 5% licence fall for MicroStrategy in the same Quarter looks ominous. The market is well aware of Cognos’ BI revenue growth difficulties over the past 12 months.

Back to the point though. Bloor evaluated all 34 vendors by the following criteria: Stability & Risk, Geographic Coverage, Maturity, Architecture, Scalability & Performance, Ease of Implementation, Support, Fit for Purpose and Value for Money, with a Weighted Total Score of all these elements.

So how do the BI and CPM offerings compare on average? Well, BI vendors do better in Geographic Coverage, Architecture, Fit for Purpose, and Ease of Implementation. BI vendors mainly offer global coverage whereas CPM is still in its early stages of market development and is strongly US centric. BI products are more mature, the architecture is better proven, and in general BI products do their job better than CPM products do today. That is, BI is easier and quicker to implement and customers are relatively assured of ROI benefits. In regards to product alone, BI is a “safe buy” for customers.

However, CPM vendors are perceived as being more stable and having better support than the BI vendors. We can trace this back to the destabilizing acquisition feeding frenzy that has been occurring in the BI market. No better example is GEAC buying Comshare, Extensity buying GEAC, and Infor buying Extensity! In addition, the higher support rating for CPM reflects the fact that larger, better funded companies on the whole have entered the CPM market, and the BI market still has a long tail of small and open source vendors that struggle to provide quality global support services.

Those areas where BI and CPM product are comparable are in Scalability & Performance and Value for Money. As CPM products are largely built on BI platforms, they perform and scale in a similar fashion when they are up and running. The key constraint on CPM market growth has been the difficulty in getting the customer CPM requirements right first time, rather than anything to do with the underlying technology. Interestingly, Value for Money is perceived as virtually identical. CPM vendors are well aware of the long-term CPM market opportunity, and also the imminent wholesale market entry by Microsoft, and are starting to price for market penetration and market share growth. Many will need a safe harbour market niche to retreat to when competition really starts to heat up in 2007 and beyond.