BI Software Sales UpBI Software Sales Up

Sales of Business-intelligence-software licenses will total $1.72 billion this year and grow to $2.13 billion in 2008, according to a Gartner Dataquest report last week. This growth is reflected in vendors' sales and earnings reports last week for their third quarters ended Sept. 30.

Business Objects SA posted net income of $11.0 million on sales of $219.5 million for its quarter. Sales should be close to $900 million for all of 2004, CEO Bernard Liautaud says. "We think we're going to be the first independent business-intelligence [-software] company to reach $1 billion," he says.

Information Builders Inc., a privately held business-intelligence-software vendor that doesn't disclose sales figures, said new license revenue rose nearly 29% from the year-ago quarter. The company also says it signed several deals worth more than $1 million during the quarter.

Revenue at SPSS Inc., which develops predictive-analysis software, rose slightly to $53.5 million. International license revenue and U.S. service revenue were down, resulting in a drop in net income to $833,000 from $2.7 million a year earlier.

Among the factors driving the market is the increased use of business-intelligence extranets to give customers, business partners, and other outside parties data and analysis, says Business Objects' Liautaud. Another is the growing size of business-intelligence installations as tools are deployed to larger numbers of people.

Other drivers include the need for companies to make sense of the huge volumes of data enterprise apps generate, an increased focus on performance management, and the need to ensure data accuracy and consistency for regulatory reporting, Gartner says.

More businesses are standardizing on business-intelligence software from one or two vendors, unlike in the past when apps were bought by departments or for specific projects. Most companies still have business-intelligence applications from a dozen or more vendors scattered throughout their organizations.