Clickstream

Consolidation Reinforces the Existing DW Product Split

After a short break from the last round of consolidations, more companies in the data warehousing market are merging. Pervasive is purchasing Data Junction, provider of (relatively) inexpensive ETL tools. On the reporting and analytics side, Actuate purchased data integration vendor Nimble (retaining just one quarter of Nimble's staff in the process).

At the same time, and Ascential purchased Mercator in early August. Informatica is rumored to soon stop selling BI tools, and continued on their buying with the purchase of Striva. Offering these products in an effort to be a one-stop provider of data warehousing tools was never a particularly good idea. The back-end ETL and integration tools and the front-end analytical and reporting products have a tenuous relationship.

The whole idea of ETL products is to get data to where other products can access it. Expertise in one class of products is not a guarantee of success in the other. The only vendor who has been successful in both areas is SAS, and that's only because they've worked very hard to keep their data storage components proprietary. They're still rather weak when it comes to working with relational databases.

What we're seeing in the market is consolidation of data access tools, with vendors filling out reporting, OLAP, ad-hoc analysis and other BI tools into product suites. This makes sense even though the interfaces are different, because much of the configuration is shared, and users often need to move from one style of interface to another easily. On the back end there is similar consolidation, with ETL, data quality, messaging and other integration products all merging into a single data integration environment. These two consolidation trends will only accelerate and reinforce the existing product categories.

The marketing from most front-end tool vendors is failing to acknowledge this reality. They keep coining new terms to replace "reporting" or "OLAP". We have "business intelligence", "business analytics", "business activity monitoring", and other vague terms ad nauseum. The data integration vendors aren't much better. To "data integration" you can add "enterprise application integration", "enterprise information integration" and Gartner's newly confusing software category for BEA, "integrated services environment".

As the market matures it will be increasingly difficult for small BI or ETL vendors to stay in business, even with the exorbitant costs of the major vendors' products.

Posted by Mark Friday, September 19, 2003 1:47:00 PM | permalink |