IDC Squeezes Spatial into the Broader Business Analytics Marketplace
a recent IDC market research study entitled "Worldwide Business
Analytics Software 2009-2013 Forecast and 2008 Vendors Shares" (as reported by Intelligent Enterprise Magazine),
a few geospatial technology companies popped up on the report under the
category of "business analytics." According to Intelligent Enterprise,
"The business analytics market grew by 10% in 2008 with Oracle having
the largest share in terms of revenue, a market research firm said.
Over the next five years, sales are expected to continue to rise at a
compound annual growth rate of 7.2%." While Oracle is the overall
market leader of the top 10 companies in the survey, ESRI and
Intergraph appeared in the second tier (11 through 35) of this list.
The top 10 vendors accounted for 66% of the total market, with the
second tier companies accounting for the rest. For greater detail on
where spatial information management and spatial analytics technology
truly fit into the mix, and to discuss IDC's work on geospatial market
sizing, Editor in Chief Joe Francica spoke with IDC's spatial analyst,
Directions Magazine (DM): This particular IDC study of the
business analytics market includes a few geospatial vendors in the mix.
Does this mean that geospatial technology solutions are now a
sub-segment of the broader software solutions market? Is this is change
from previous studies? Why now?
Dave Sonnen (DS): IDC has included spatial information vendors in
its broad business analytics practice for several years. While
companies like ESRI, Intergraph and PBBI do a lot more than just
analytics, some of their software does include sophisticated analytic
capabilities. So, IDC tracks spatial companies as part of the overall
business analytics market.
Also, most business analytics companies include spatial capabilities in
their analytic platforms. It's hard to track exact revenue figures for
features in a software platform, but IDC does think it's important to
recognize the role that spatial capabilities play in enterprise markets.
DM: We noticed a change in terminology in the report. The term
"business analytics" was used, while including many "business
intelligence" software companies in the mix. Has "BI" become too
generic a term for a category that includes "CRM" and "ERP" and
everything in between?
DS: All the analyst firms have their own taxonomies for the markets
they cover. Those taxonomies are somewhat arbitrary, but they give the
analyst firms a consistent structure for tracking revenue and trends.
IDC uses "business analytics" as a broad category that includes
analytic applications, business intelligence tools, data warehousing
platform software and spatial information analytics tools. We divide
some of those categories into subsegments, like financial analysis
software and CRM.
To answer your question, "BI" is too broad and loosely defined for
IDC's purposes. But, IDC's taxonomy is probably too granular for most
people. Generally, most people will combine some of IDC's categories to
derive the market potential data they need for a particular application
or new business.
DM: What are the implications for geospatial players now that they
are included in the mix? Will this help or hurt their chances of
expanding their reach into enterprise computing? Does this mean that
they will have to collaborate with the business analytics providers to
get the attention of CIOs?
DS: In its report, IDC is just recognizing that spatial technology is part of the broad business analytics picture.
Most geospatial companies are in the thick of the enterprise business
analytics battle. They are part of a complicated web of partnerships,
co-development arrangements, strategic relationships and direct
competition that swirls and twists constantly. These battles will be
lost and won at the individual account level. All sides will proclaim
victory and "dominance" - just normal market noise. The companies that
keep making money over time are the actual winners.
DM: What implications do you see for the niche location intelligence
companies like SRC, geoVue and Tactician? Do you expect these companies
to seek a merger with other BI companies or structure their own mergers
to form larger, more specialized firms?
DS: There are many, many places for spatial analytics in enterprise
IT. The niche players and new innovators all compete for the spaces
they think they can win. But, the bigger players generally win the
financial battles. The niche players can either try to defend some
space they think they can hold or they can form relationships with the
big guys. Sometimes that means selling out.
DM: PBBI was not mentioned in this report. What significance do you see in that?
DS: Pitney Bowes is definitely included. IDC just hadn't updated the report with the new PBBI name.
DM: Several companies mentioned in the report like Netezza, TIBCO
and Informatica have dabbled in spatial solutions. Do you expect them
to expand their efforts into the location intelligence market or is
"LI" still flying under the radar?
DS: Most business analytics companies have some kind of spatial
strategy. Some, like Netezza, are currently quite focused on spatial
analytics. Some companies, like PBBI, brand their products as "Location
Intelligence" and some use other terms that they like better.
I don't think that "Location Intelligence" is under the radar; it's
just one of many branding terms that companies will use to
DM: The market for "business analytics" is expected to grow by a
7.2% compounded annual growth rate. Can we expect similar growth in
DS: Right now, it looks like spatial analytics will grow a bit
faster - how much faster is hard to say. But, there is currently a lot
of interest in spatial technology broadly, and I expect that interest
will translate into increasing revenue as the recession abates.
DM: What can you tell us about the overall size of the spatial analytics and the broader spatial information management market?
DS: We're pegging the total spatial information management software
market at $3.19 billion this year. That's just software licenses and
maintenance. Data and integration services would add to that number.
We think that the spatial analytics software share of the spatial
software market is $717 million this year. That only includes revenue
from the spatial information management providers.
We can't track spatial revenue inside business analytics companies.
They just don't make that kind of detail available, if they have it.
Since most business analytics companies have at least some spatial
capabilities, they are seeing worthwhile returns for those capabilities.