Market Analysis

[JohnG]

Here's a question:

I have noticed elsewhere on the CORTEX discussions about Gartner and Forrester research of the big vendors. What research is there on open source?

Does anyone know?

Attached is an old (2006?) IDC report. I think that is shows a pretty moribund set of vendor products and that not much has changed since then!

John

[Steve Bennett]

Q&A: The Maturing Open Source Model
7/15/2009

By Linda L. Briggs

One way to address cost issues with business intelligence software is through open source software, but there are clear differences between free open source and commercial open source. These differences are becoming more defined as open source software matures and gains popularity.

For a primer on the different models of open source being offered in BI, and their advantages and disadvantages compared to commercial BI software, we turned to Scott Barnett, co-founder and chief operations officer of Bluenog Software. Barnett is an industry veteran with 20 years of experience in the software industry at both established companies and startups. He also serves as marketing chair of the Open Solutions Alliance (OSA).

BI This Week: Studies show that BI is still a growth area within IT spending, despite the continuing economic downturn. Why is that, and what does open source software bring to the table in today's economy?

Scott Barnett: BI has always been important, but in good times, executives can afford to rely more on "gut feel" to make strategic decisions. In this economy, it's imperative that business executives make good decisions -- not based on anecdotal data but on hard facts. The only way to do this is by crunching numbers, reviewing metrics, and considering historical data. Doing this has brought the issue of BI to the forefront.

Traditionally, there has been some doubt about the cost of large BI projects relative to the return. Given that data warehouses can take years -- and millions of dollars -- to build, the results need to yield greater savings than the development costs. Open source has brought a new cost structure to BI, allowing people to dip their toes into the BI waterfront before they dive in. These tools have many of the features and much of the functionality of more established proprietary vendors.

They also allow customization with ease. This is a major need in the BI marketplace -- there is perhaps no other sector in IT that requires as much customization, so it's no surprise that the market has reacted favorably to a trend that leads to lower acquisition costs and higher flexibility.

When we talk about open source, how do you define the term "commercial open source"? It's a phrase that's often used in different ways.

Commercial open source, or COS, can be interpreted in a number of different ways. At the highest (and simplest) level, COS is characterized by a company that leverages open source in some way and packages it for commercial use. This includes providing support, documentation, and typically a customized service-level agreement (SLA).

There are many different ways to establish this -- a common method is to provide an "open core" license for free open source software, and an enterprise license for the commercial version. Another popular method is for a company to create a commercial product that is based on one or more open source projects and offer it via a commercial SLA.

What's interesting is that many open source companies do not provide the source code in their enterprise version, so from a licensing perspective, it begins to look a lot like the traditional enterprise software model. The main difference is that there is still a community behind the majority of commercial open source products out there.

It's important to understand what type model you're getting when you evaluate COS because everything from customer support to contract terms will be impacted. (Of course, the most important aspect is whether the software solves your business problem!) We are seeing a blurring of the lines around COS. Some firms will take the best of free open source software (FOSS) terms and combine them with traditional commercial terms. That creates a hybrid licensing model that gives end users the type of support they are used to, along with "one throat to choke," which they've come to expect. That hybrid model also gives the developer the power, control, and flexibility that they enjoy with FOSS, such as access to the source code and the community.

What are some advantages, and disadvantages, to COS compared to commercial software?

As I mentioned earlier, COS is starting to look more like traditional commercial software, but with a few major differences. First, the cost of COS will be significantly less than commercial software because the community is responsible for building some portion of the product. This means the savings in development costs can be delivered directly to the end user.

Also, COS generally tends to offer more flexible pricing options than commercial software. We typically see 9-to-5 and 24x7 support as separate options with COS (with variable price points for each), while commercial vendors tend to make 24x7 support the "default" option -- meaning you can't pay less if you only require 9-to-5 support. Some COS vendors also provide the source code, which can be a major advantage because it eases integration headaches -- a large and growing problem in IT.

Of course, commercial software has had major advantages as well -- most commercial packages come with extensive documentation, training, and infrastructure, and a guarantee that the company (as long as it stays in business) will provide a certain level of support. COS is approaching this level of maturity, but it isn't there yet. There is also the simple advantage of having years of improvements and features that cannot be duplicated in a short time.

Let's compare COS to non-commercial, or free, open source. What are some pluses and minuses there?

The real value of COS compared to FOSS is the support aspect. It's become apparent that licensing models are important, but having that single vendor in the event of a problem is the real value of COS. We talk all the time about how FOSS is a fantastic example of sweat equity at work -- your employees will spend more of their own time working with and getting FOSS operational, and most of the aspects around an enterprise software project need to be handled in-house. There is absolutely no guarantee on the quality or quantity of documentation, third-party support, or the reliability of FOSS.

That doesn't mean that FOSS isn't quality -- in fact, many surveys have shown a much lower defect rate in FOSS compared to commercial software. However, most companies see the value in paying somebody else for their expertise so the core team can focus on the main business value -- and this proposition doesn't change when considering FOSS vs. COS. If a company wants to invest in technology that they are not expert in and doesn't want to pay internal people to become experts, then you trade the "sweat equity" for actual capital to move faster.

At Bluenog, you've bundled a BI solution with both portal and content management software. What's the thought behind that combination?

Bluenog ICE (Integrated Collaborative Environment) solves integration problems. Most enterprise applications built today require CPR (Content, Presentation, and Reporting), which has traditionally been solved by acquiring different best-of-breed products and manually integrating them -- a challenge at best.

Bluenog ICE keeps costs low by using popular and well-known open source CMS, open source portal, and open source BI projects (primarily from Apache and Eclipse). We have spent significant effort building a core platform for these projects that delivers features such as single sign-on, workflow, centralized administration and deployment, support for wikis, calendaring, rich Internet applications (RIAs), and an integration framework to connect with legacy applications such as ERP/CRM, external Web services, and other legacy data.

This allows for rapid out-of-the-box creation of enterprise applications with minimal integration costs. The acquisition costs of ICE are dramatically lower than either buying best-of-breed or manually trying to build these integration hooks yourself.

Linda L. Briggs writes about technology in corporate, education, and government markets. She is based in San Diego.

lbriggs@lindabriggs.com

[JohnG]

I just posted an article about this in another thread here.

[JohnG]

From TDWI today:

BI for the Masses, Birst Style
8/26/2009

By Stephen Swoyer

The demise of software-as-a-service (SaaS) BI specialist LucidEra put new light on the still-incubating SaaS BI and DW markets. It also raised questions about the viability of the SaaS model -- questions, argues Brad Peters, CEO of SaaS BI specialist Birst Inc., that are, to a degree, inappropriate.

Peters says that LucidEra wasn't a SaaS B player in the strictest sense of the word. The chief problem with LucidEra BI, he contends, was that it was too specific: its targeted analytic applications limited its applicability to wider audiences.

For these reasons, Peters argues, LucidEra wasn't so much a SaaS but an ASP (application service provider) vendor.

Peters says Birst practices what it preaches. It is not a purveyor of analytic applications. Barring a couple of small exceptions, Birst does not market pre-fab, vertical- or industry-specific applications for pipeline analysis or any of a score of other practice areas. Instead, Peters positions Birst as a general-purpose BI platform -- in other words, precisely the kind of proposition that LucidEra itself was supposed to be.

"What Birst is is essentially taking the same kinds of user experience you got from Siebel analytics -- [so things like] schema generation and dynamic data warehouse construction under the covers," he observes. "You can pull in data from any different source; [the Birst service] will construct facts [and] dimensions for you -- and have the biz model flexibility to navigate data in the same way that offerings that are on-premises do."

Peters' criticism of the niche nature of LucidEra's analytic application isn't new. For example, unstructured data guru Seth Grimes, a principal with consultancy Alta Plana, has pointedly described LucidEra as a "sales analysis platform" -- rejecting its description as a "general-purpose" BI platform.

In a posting on the personal blog of BI industry veteran Timo Elliott (who doubles as senior director of strategic marketing for SAP Business Objects), ex-LucidEra employee Alex Moissis -- who also works in marketing with SAP Business Objects -- speculated that LucidEra foundered when it was forced to narrow its focus (away from that of multi-purpose platform designed to support a variety of analytic applications) "down to a single application area."

Moreover, LucidEra's competitors have made similar allegations; still-gestating SaaS BI start-up GoodData, for example, contrasts its catholicity with LucidEra's analytic "nichiness." That being said, Peters can claim especial credibility in this regard: he's a veteran of the former Siebel Systems Inc., where he helped launch Sales.com, Siebel's ill-fated ASP CRM entry.

In other words, Peters says, he knows what doesn't work when it comes to application hosting or (and he's on more tenuous ground here) SaaS; putting aside the reasons for Sales.com's demise -- which Peters insists had a lot to do with Siebel's unimaginative design and marketing -- the ASP model itself simply didn't make sense.

"Why aren't there any ASPs? Think about it. If I had you install MySiebel and you're going to run it [in a hosted context], how is it different? Fundamentally, you have the same knobs to turn, the same bells and whistles, the same software architected for the same deployment models; there's no differentiation there," he says. Factor in the operational strictures of your typical application hosting or ASP deployment -- where customers expect more aggressive service levels than they do from their internal IT organizations -- and the "cost justification of ASP got wiped out."

The genius of SaaS, Peters says, is that software deployment is engineered into the application service itself.

"Saas when done as SaaS, not as an ASP, is reengineering the entire software stack for delivery in a service-oriented model," he says. "There's a big difference between SaaS and [hosting applications on] virtualized hardware, and really the difference is that I've moved my hardware to the cloud and can provision it faster -- that's capital provisioning as opposed to application provisioning."

In other words, Peters contends, virtualizing an application instance and then hosting it -- which in a sense amounts to a nifty reprise of the defunct ASP model -- doesn't get you any of the benefits of SaaS. "If you came from the platform part of the world, you believe that just by making the OS virtual, you've solved the problem, but that isn't what happened. It took an application company [Salesforce.com] to build a CRM system that anyone bought."

That isn't the approach taken by Birst, Peters says. "Fundamentally, the entire stack is hosted, but we rewrote it from scratch to tie together the data management, the data integration, the OLAP and ROLAP, the dashboarding, reporting, and scorecarding all in one layer," he says.

Birst's selling point is that all of its capabilities can be rapidly deployed. That's also where most of the development heavy-lifting came in, Peters indicates: "The fact that you've turned the deployment of the application serviceable is where the expertise comes in. What that requires is people who know how to deploy apps and have spent a considerable degree of effort to make this thing work -- but look at the result! When you spin up salesforce.com, it's like that; but if you try to spin up SAP -- wow, nobody's ever said SAP is to spin up."

Outside of a few analytic applications (specific to wealth management and insurance), Birst doesn't market industry applications (ala LucidEra or SaaS competitor PivotLink); Peters says Birst prides itself on its emphasis on the basics.

"We focus more on the traditional [BI] stuff -- like reporting. We actually do reporting, because it's important, and because it's what our customers need," he says.

[admin]

Open Source in the Business Intelligence Market
Crossing the Threshold to Mainstream Adoption

The paper presents results of a survey on the adoption and use of open source software to deliver reporting and analytic capabilities, covering all parts of the stack from the database to end user delivery. 200 people participated in the survey that was conducted in Q2 of 2009.

Sponsored by Infobright, Jaspersoft and written by consultant Mark Madsen.

[admin]

Q&A: Open Source Continues Move into Mainstream
11/4/2009

TDWI, By Linda L. Briggs

For many companies, open source often means saving money -- or at least that's the initial draw. Other reasons, such as flexibility and vendor independence, often follow. It's not surprising given the current economy that a recent survey found a surge in company-wide deployments of open source BI and data warehousing software, with more than 40 percent of respondents having deployed or planning to deploy the software this year.

"Open source business intelligence has clearly moved beyond the early adopter phase," according to Mark Madsen, president of Third Nature, Inc. and author of the survey, "Open Source Adoption in the Data Warehouse Market."

Sponsored by Infobright and Jaspersoft, the survey also found that while cost still tops the list of reasons why customers are deploying open source BI and data warehousing software, "vendor independence" ranks next. Madsen concludes that this is the result of several factors, including market consolidation fallout, recent price increases from mega-vendors, and customers' desire for more control over what they can do with software.

Third Nature, Inc., a research and consulting company specializing in business intelligence (BI) and information management conducted the survey between April and June 2009; over 200 people participated, with 63 percent of respondents identifying themselves as IT professionals, managers, or executives. We asked Jaspersoft vice president Nick Halsey for some perspectives on the survey results.

The report can be downloaded at Open Source in the BI Market White Paper Form (short registration required); an archived Webinar in which Madsen discusses the results is available at The State of Open Source BI and Data Warehousing - Connect Pro (short registration also required).

BI This Week: What results from the survey did you find surprising?

Nick Halsey: Perhaps the most surprising result is that open source BI is primarily being adopted by small and large organizations, while the mid-market is lagging behind. There was some speculation that the mid-market would be the biggest adopter of open source BI, but the survey actually found that small and large organizations are adopting open source BI and data warehousing software more aggressively, with the mid-market trailing slightly.

What do you think accounts for that difference? Why is the midmarket slightly behind large and small companies on adoption rates?

At Jaspersoft, we believe the mid-market is lagging a bit behind for several reasons, including limited IT resources, heavy reliance on Microsoft-based solutions, and a generally conservative stance towards adopting new technologies.

The general perception sometimes seems to be that business intelligence and data warehousing have been developed and adopted more slowly than other kinds of open source applications. Is that true, and if so, why might that be?

I don't think open source BI and DW are lagging behind other open source applications, but it is true that the most aggressive adoption of open source has been with infrastructure and application development products, so you see a lot of operating system (Linux), database (MySQL, Postgres), application server (JBoss), and development tools (Eclipse and others).

However, open source BI is growing rapidly. In the last year alone, Jaspersoft saw over two million downloads and experienced 80 percent year-over-year sales growth.

The survey found that most open source BI applications today support a comparatively small user base: 54 percent of deployments average between one and 24 users, and less than 10 percent support 500 users or more. How is that poised to change, and why?

As we discussed earlier, most of the adoption has been either by very small or very large companies, so that statistic is not that surprising. Also, those numbers don't include the very large deployments supported by OEM applications, in which the open source BI functionality is embedded in a larger solution. Jaspersoft has hundreds of OEMs who, in turn, support many tens of thousands of users. Those numbers are accurately reflected in the deployment results you mention here.

Once the economic downturn eases and there is less of a constraint on IT budgets, and correspondingly, less risk aversion in companies, the mid-market may help adoption accelerate. We'll then see a greater number of medium-sized user bases.

The report seeks to dispel the persistent myth that small companies are the primary users of open source. In fact, the report finds that this is no longer the case, if in fact it ever was, since plenty of large companies are adopting open source. Isn't a typical adoption trend for many new technologies that either large companies or else very small firms tend to adopt first?

You're correct in noting that this is a normal technology trend. With many technologies, early adopters tend to be either very small, nimble, technically adept startups, or larger organizations with robust internal IT staffs that have the resources to experiment with new technology.

Currently, just a quarter of companies are using open source, but one of the report's key projections is that we are on the cusp of a big change as open source is adopted much more widely. What points to that happening?

Beyond the logic of the "tipping point," which observes that all technology gets to a point on the adoption curve where resistance fades and adoption accelerates, we can simply look to the statistics we see at Jaspersoft. Downloads, inquiries, and sales are all accelerating. We hear the same sort of data patterns happening with partners of ours in the sector, such as Talend (open source data integration and ETL tools) and Infobright (column-oriented relational database software built atop MySQL).

Gartner predicted that by 2012, 80 percent of all commercial software will include elements of open-source technology. Garnet also noted that many open-source technologies will be mature, stable and well supported. [Editor's Note: a summary of the Gartner prediction can be found at http://www.gartner.com/it/page.jsp?id=593207.]
Another key finding from the report was this: While cost remains at the top of the list of reasons why customers are deploying open source BI and data warehousing software, "vendor independence" ranks next on the list. What do you see as driving up that particular reason?

As Mark Madsen, the study author, points out, this is probably a combination of factors, all of which are helping drive interest in open source. Those factors include fallout from the market consolidation we're seeing, along with recent price increases from mega-vendors, and quite simply, the needs of customers to have more control over what they can and can't do with their software.

Respondents said that while license compatibility and procurement processes are no longer concerns, maturity and support of community-based projects still remain as barriers. How is Jaspersoft in particular addressing that issue?

The key is to understand the difference between community-based projects, where maturity is a concern and there may not be professional support options, and commercially backed open source projects and products such as Jaspersoft, where there are professional engineering, support, and product management teams delivering enterprise-class service-level agreements for the products in company portfolios. Many organizations find their needs are better served by choosing a commercial open source product over a pure community-based option.

What does Jaspersoft offer that ties into this discussion?

Jaspersoft supports both community open source editions and commercially licensed professional editions of each product in the Jaspersoft Business Intelligence Suite. The former are free and available under the open source GPL license; the latter come with professional subscriptions and include warranties, indemnification, enterprise-class support and certification, and all of the other features and services one would expect in a traditional enterprise software product. It's the customer's choice of which edition best serves their needs and budget.



Linda L. Briggs writes about technology in corporate, education, and government markets. She is based in San Diego.

lbriggs@lindabriggs.com

The market analysis can take two different forms. In the first, is a method used by investors to search the market and try to determine whether up or down, to make investment decisions. In the second case, a field used by traders to analyze the market for its customers and determine the best course of action to be taken to improve sales and profitability.

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