On my first week of sabbatical, my Tropical Garden 2.0 project was stalled by huge news regarding the potential sale of Qlik that lit up discussions of inevitable BI industry consolidation. In January this year, I mentioned the BI Wars would be intensifying. Then a month later on February 4, 2016, Tableau’s stock fell over 45%. Now my financial portfolio manager following seems to be really picking up as my predictions become reality.
Industry experts and practitioners alike have been talking about BI industry consolidation for years now. Just run a quick Google search for those terms and look at how many articles are returned on this topic. We all knew it was coming. It was just a matter of timing.
I wrote about consolidation and commoditization in the past. In April 2014‘s BI Industry Midlife Crisis article, I wrote about all the data viz solutions looking and sounding alike after attending the Gartner BI Summit last year. This year was no different. I know the various data viz solution differences (and they are vastly different) but the average business buyer of BI apps might not be able to tell. At that time, I also mentioned my sheer surprise in just how many newcomers there were in the exact same data viz space. I knew there were a lot of start ups with the reduced barriers to entry cloud and big data platforms offer. I had no idea that Gartner saw over 1000! Those analysts are not bored.
In that article I voiced my opinion – and I still truly believe it. The future is all about getting the most data possible into the cloud. Cloud wars are the most critical wars for the big vendors to win.
Niche players won’t be around for long as the industry consolidates. Mega vendors with cost advantages will buy them or destroy them in the mounting cloud and data wars.
Big vendors will do whatever it takes to get a data gravity advantage. “Apps are free because data is gold.” – I saw that quote somewhere so I can’t claim it. Sizzling data viz sells underlying data storage, query, ETL and other not so gorgeous looking services to business buyers. No one goes to a business buyer and shows them storage arrays, ERD diagrams, or ETL flows to win the business. Anyone that has sold BI or analytics solution or consulting deals can tell you that fact!
Even in October 2013 I talked about commoditization, cool new players, big vendor financial advantages and the longer term market dynamics. Rumor has it that cool new player Zoomdata powers Amazon AWS Quicksight. (Disclaimer: I do not know if that rumor is true.) Looking around there are other big players out there that don’t have compelling data viz yet. The niche players would be a win for them to grab if they can afford to do so.
Has BI Peaked?
Interestingly, Ian Andrews in his Strata + Hadoop World keynote this week highlighted a theme “BI Peak”. Ian discussed the possibility that the data viz market is completely saturated now. The only way to win new business is to steal it from competitors. Honestly, Ian may be right. I have stayed awake at night with the same thoughts and no one believed me.
Usually data viz tools are purchased by business “power users” – people that use pivot tables in Excel. There are only so many of those folks out there. Even after the power user builds it, not everyone uses data viz. Cindi Howson shared BI adoption rates many times in the past. In her 2014 findings, “BI adoption as a percentage of employees remained flat at 22%, but companies that have successfully deployed mobile BI showed the highest adoption at 42% of employees.” I don’t think that viewing BI solutions is too difficult for the remaining 58% of business users. Additionally, Excel is still the most popular BI tool in the world for ad-hoc analysis.
You can agree to disagree with me. The data viz tools today are easier than ever for anyone to use. I just don’t see everyone building their own analytics – especially if they don’t even look at analytics built by others. I don’t. CEOs, marketing executives, sales reps, software developers, researchers, writers, and other business users do want good looking analytics to sell or support whatever it is that they do.
The BI/data viz market is mature and overpopulated. We have been seeing price reductions and freemium offerings for at least five years now. Why does a company give away something for free? Free and low cost “foot-in-the-door” offerings are classic marketing tools to get prospect information and new customers. Marketing 201 = Loss leader offerings, coupons, and samples (free trials) help win new customers to cross-sell other profitable services. (Yes, I do have a marketing degree. Shhhh, don’t tell anyone. I fell madly in love with data in my stats and marketing research classes.)
I believe niche players are going to struggle even more if they don’t add broader, profitable offerings into their portfolios to sell * if * they want to remain stand-alone players. The narrow focus that helped them skyrocket when there was little competition is a risk in a saturated market with big players. I said a zillion times before that Tableau was in the right place at the right time. The financial results of Tableau and Qlik this past quarter do seem to reveal that times have changed. The competitive situation for them is indeed intensifying but are the competitive solutions able to retain trial and newly won users? I suspect the best niche players will eventually sell their offerings to big players. For the niche player customers, I assume that you will be treated well regardless of what happens. The end goal should be to win more of your business.
Back to Project Tropical Garden 2.0
I am assigning myself a “D” on my much needed sabbatical thus far. I really need to get back to gardening and Mr. Underwood’s long list of tasks for me. His devious master plan was to bring home a dashboard with 17 pie charts on it knowing that I would not be able to resist fixing it. Sigh…it worked.
From a future career exploration perspective, I spoke with a few admired industry peers and read Harvard Business Review “Your Next Move”. My favorite quote in it was as follows:
How a person chooses to respond to challenges, learns from them, and grows as a person to turn challenges into new opportunities empowers them to own their destiny.
If you ever find yourself where I am at right now, that publication is highly recommended. With that tip, I am signing off and getting back to my Tropical Garden 2.0 project.