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TDWI, 1/7/2009, By Stephen Swoyer

With market watchers Gartner Inc., IDC, and Forrester revisiting and revising their IT spending forecasts downward for 2009 and beyond, spending on business intelligence (BI) and data warehousing (DW) appear, paradoxically, to be holding steady or poised for growth.

If BI and DW spending do, indeed, increase, spending on analytics -- the number-crunching, partially revelatory technology that accounts for much of the value of associated with BI and DW -- should surge.

A recent report from IDC -- Worldwide Business Analytics Software 2008-2012 Forecast and 2007 Vendor Shares published in the midst of last fall's severe economic crisis -- painted a picture of a thriving analytics segment, one in which real growth clearly outpaced projected growth in 2007. The upshot, IDC analysts say, is that the analytics market should buck an otherwise downward economic trend, with bright growth prospects through 2012.

The analytics segment, which encompasses both performance management (PM) tools and applications and DW platforms -- grew by 12.7 percent through 2007, outpacing IDC's own projection by 1.5 percent. All told, the PM tools market amounts to a staggering $15.4 billion, while that for DW systems clocks in at $6.7 billion. Oracle was the analytic market leader, growing its share by an ever-so-slight .1 percent in 2007, which boosted it to nearly 18 percent (17.6 percent, to be precise) of the market entire.

Where analytics are concerned, IDC predicts growth at an astonishing clip. One upshot of this, the market watcher says, is that the demand for analytic talent could far exceed the available supply. "[Our] analysis suggests that we are at the beginning of a new wave of business analytics deployments that will materialize over the next decade and will be focused on addressing two primary demands [i.e., an ability to handle both more data and more users]," write IDC analysts Dan Vesset and Brian McKnight.

Vesset and McKnight predict that unstructured and semistructured data will finally get their due. "As the awareness of the potential of business analytics solutions to influence performance increases, the need to combine structured transactional data with various other forms of unstructured, semistructured, and rich media content becomes more acute," the pair indicates.

Will Analytic Demand Outpace Supply?

On the supply front, however, the industry seems ill-equipped to meet this demand, the IDC analysts indicate. As a result, many shops will embrace automation as a (not-quite-stopgap) measure to address the shortfall. This could place IT -- which is highly sensitive to disintermediation -- at odds with its line-of-business customers. "[T]he number of internal IT developers and analytics experts ... doesn't seem to be keeping pace with the increased demand from end users," they write. "The widening gap between supply and demand ... will need to be filled with automation, external services firms, ... [software-as-a-service] solutions, or outsourced business analytics."

One upshot of this, Vesset and McKnight urge, is that IT must make its peace with automation: the potential analytic workload will just be too much for it to handle by itself.

"IT groups must overcome this perception given their existing and future high and potentially unsustainable workload requirements," they note. "The outcome of further intelligent process automation is not that IT staff will be eliminated due to automation. Instead, IT groups will be freed to perform the higher-value-added tasks of developing new applications and enhancing existing applications to support innovation and internal process efficiencies."

The analysts contend that "automation must be viewed by IT as a means to show its true value to the organization." (The two concede that "some internal IT staff" will likely be affected by the automation trend, but such displacement could itself lead to additional opportunities -- in outsourcing or systems integration, for example.)

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