Need to optimize keeps analytics sizzling

Large IT vendors such as Oracle, EMC and IBM are not only acquiring companies that have business intelligence (BI) and analytics capabilities to round out their existing product portfolio, but also those which have "preconfigured solutions" that can be easily assimilated, analysts noted.

Gartner's principal research analyst Eric Thoo said large IT organizations are currently going through a period of "optimizing technology", and BI software is a key component to providing a more comprehensive IT offering to customers. He explained that such optimization involves integrating existing hardware and software capabilities with analytics technology in a preconfigured "box" that can be easily deployed.

With such a box, enterprise customers can use it for faster implementations and not have to worry about the necessary in-house expertise to optimize the product post-purchase, Thoo noted in a phone interview with ZDNet Asia.

To supply customers with such "optimized technology", the analyst said companies such as IBM, EMC, Oracle and SAP have all been active in buying their way to pole position.

IBM, for one, forked out US$1.7 billion in September for data analytics firm Netezza, which offers a data-warehousing appliance designed to help businesses handle high-performance analytics. Big Blue pointed out the ease of installing Netezza's appliance as a way to quickly get analytics into the hands of business units such as sales, product development and human resources.

Earlier in June, storage giant EMC also splashed out for Greenplum, another privately-held data warehousing database management systems (DBMS) vendor. The latter has a portable DBMS product that is open and supported as an appliance based on x86 hardware sold by Cisco, Dell, Hewlett-Packard and Oracle acquisition, Sun Microsystems.

SAP also recently concluded its U$5.8 billion acquisition of Sybase, which brings to the German business software firm the latter's high-speed in-memory databases and mobile application platform. Oracle, meanwhile, has been enhancing its Exadata data warehousing appliance with technology from its Sun acquisition, which was formalized in January this year.

Stockpiling on analytics capabilities
All said, the business analytics software space is "red hot" right now, said Sharon Tan, research manager of IDC Asia-Pacific's information management and analytics department.

She said most of these IT vendors have historically had "some sort of data management or data analysis background" and are setting their sights on building up their arsenal of business analytics technology in "complementary areas". Business analytics software is a combination of BI tools, analytic applications and data warehouse platform software, she noted.

"[These acquisitions reflect] a growing demand for solutions that help companies derive more insights out of the massive amounts of data generated and stored in a company's IT system, and doing so in real time as quickly as possible," Tan added.

Remus Lim, IBM Singapore's country manager of information management, expanded on Tan's views, explaining that market demand for fast deployment of big data analytics is on the rise. In his e-mail to ZDNet Asia, Lim said that in top-performing organizations, analytics has "replaced intuition" as the best way to know what markets to pursue, how to configure and price offerings, and how to identify cost-efficient offerings.

Additionally, the main challenge facing governments and organizations today is in keeping pace with a rising tide of structured and unstructured data generated across myriad sources both in and out of traditional business boundaries, he noted.

"Businesses and governments alike are looking to use the power of analytics at every level to gain deeper insight into their growing data and to make smarter business decisions," Lim said, adding that "new stimulus investments" in electronic medical records, fraud detection and smart grids are also driving demand for analytics.

Meanwhile, Peter Cooper, vice president for presales and partners at Greenplum EMC Asia-Pacific and Japan, said the potential market for data consolidation and analyzing these data is huge.

During a face to-face interview, the Greenplum executive mentioned that only about 10 percent of customers have "started thinking" about consolidating their disparate data warehouses and have rigorous software that can analyze a company's pool of data.

"So far, there have been no viable ROI (return on investment) for the consolidation of data warehouses because by the time a roadmap for consolidation is done up, another warehouse has to be created to store another set of data," noted Cooper.

To address this challenge, quick-to-deploy analytics appliances such as EMC Greenplum's Data Computing Appliance, which was introduced into the market last Wednesday, are increasingly gaining favor among companies looking to harness their existing data resources, he added.

IDC's Tan thinks such interest in the analytics space will result in a lucrative market for IT vendors to play in. Citing the company's research, she stated that the analytics software market will reach US$2.5 billion by 2014 on the back of a five-year CAGR (compound annual growth rate) of 10.5 percent.

"Data analytics have come of age. It is no longer the domain of a handful of power users, but is increasingly becoming more pervasive within an organization. Executives, LoB (line of business) managers, customer-facing employees are increasingly aware of the benefits that analytics can bring and are seeking to better utilize the tool to help them make better, fact-based decisions," she added.