Analytics Software Revenue Runs Risk of Collapse, Independent Analyst Warns

Analytics Software Revenue Runs Risk of Collapse, Independent Analyst Warns

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Big Data is big business, and things are great for BI and analytics vendors in the current landscape. Organizations of every shape and size have bought into the hype, hoping to cash in on the next gold rush that is data analysis. Providers are slinging subscriptions, enterprises are forking over their checkbooks and data analysts are uncovering patterns they would never have been able to predict in their wildest dreams. Independent research firm Research and Markets even forecast the Business Intelligence market to expand by more than $10 billion in the next four years.

What could go wrong?

Analyst house Gartner, Inc. shares in the short-term excitement but warns that trouble may be lurking around the corner. Like Research and Markets, they too expect considerable growth in the analytics software market in 2017. However, they warn of a coming downturn that may cause a shakeup: “The modern BI and analytics market is expected to decelerate, however, from 63.6 percent growth in 2015 to a projected 19 percent by 2020.” While 19 percent revenue growth is by no means depression-era economics, it does represent a substantial downturn. What could the cause be?

Gartner believes that analytics is on the cusp of becoming a mainstream enterprise technology, and while adoption of BI tools is still growing at a rapid rate, revenue will be curbed by pricing pressures. This provides undeniable proof that the marketplace has become saturated with tools that meet organizational use cases.

Continued growth in BI and analytics will have to come from non-traditional sources, such as the integration of different feature sets, capabilities that can handle growing volumes of unstructured data and cloud compatibility. Rita Sallam, the excellent Research VP at Gartner, Inc. explains: “Organizations 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 startups.”

Though things appear hunky-dory in the space, it appears to Solutions Review that companies in the not-too-distant future will suffer from a paradox of choice. It’s actually been scientifically proven that having too many options breeds a paralysis of sorts. On one hand, this is bad news for providers that will have to step their game up, and on the other, it’s going to breed so much competition between tools that buyers are really going to have their work cut out for them.

What do you think? Will BI and analytics be influenced by the seven dynamics Gartner outlines?

Tim King
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