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Is a golden age of business intelligence dawning?

No longer a closed-off business intelligence (BI) tool, analytics are reaching outside of the firewall as companies seek to extract greater value from customer data.

The race toward analytics applications has stepped up a gear as Business Objects and Informatica have put analytics at the center of new product strategies and Cognos is readying its own tools. No longer a closed-off business intelligence (BI) tool, analytics are reaching outside of the firewall as companies seek to extract greater value from customer data.

Analytics software offers a significant new opportunity in the BI market, but is not likely in itself to spawn a whole new economy of companies created specifically to service the demand. Instead, it offers some rich new pickings for existing companies and establishes BI tools as key to integrating supply chains and relationship management applications.

However, what Business Objects, Informatica and others are doing to a large extent is essentially offering packaged, premade analytics, or "a veneer," as one analytics CEO bemoans. It's not rocket science. They can't yet operate on the wealth of legacy data a company might have or offer the depth to answer the "what if?" questions.

Merrill Lynch offers a novel view of what's occurring: "To oversimplify each company's analytical application deliverables, all are packaging a solution previously sold as a tool where the business logic was provided by the knowledge worker using the tool. What has changed is that all are now embedding best practices and application logic that eliminates the role of the knowledge worker. The end result is a packaged application. The packaged applications serve a broader enterprise audience."

And the market is doing a good job of talking itself up. Sitting here, there certainly appears to be more hype than products flying around.

Moreover, as what looks like a golden age of business intelligence begins to dawn, we wouldn't be surprised to get up tomorrow and find that IBM or Microsoft had bought their way into the market. They will certainly want to participate in a more comprehensive way than they do now, and companies in the space currently have reasonable valuations attached to them.

This is largely because what the business intelligence companies have proved exceptionally good at -- and almost all have taken their turn on this dance floor -- is consistently failing to execute on strategy, with mindshare swinging from one to another in quick succession.

At the moment, Brio and MicroStrategy are leading the underperformers, while

Hyperion is focused on a partner strategy to leverage its technology to market. Business Objects and Informatica, with their high-profile OEM deals, are leading the way, with Cognos ready to make its own move into analytics after licking the wounds incurred by its Ithena venture.

Bringing further momentum to, and quickly converging with analytics, is reporting. Extranet reporting leader Actuate is adding analytics as fast as it can, as it finds managers want to perform analysis on the reports as well as read them. While Actuate reports are developed as applications by IT departments, Business Objects focuses on enabling users to create their own reports. The two approaches are converging around the concept of analytic dashboards.

In announcing its new analytic applications this week, Business Objects and Informatica have at the same time terminated their OEM relationship. Informatica Application version 5 doesn't rely on Business Objects any longer, having created its own BI tools for ad hoc query, OLAP and personalized information access. Previously, Informatica put the data into data warehouses and Business Objects pulled it out and put it into reports.

Business Objects, on the other hand, has a two-pronged approach. It has reversed its Ithena analytics offering back into the BI garage as Customer Intelligence and Application Foundation, and has teamed with high-end analytics hotshot WhiteLight Systems for complex analytics and access to legacy data. The two are jointly selling a connector that enables users to access WhiteLight analytics from within the Business Objects front-end client.

Informatica has already announced an OEM deal with MicroStrategy, while Business Objects has teamed with Ascential, Sagent and Acta for ETL (extract, transform and load) technology, which it used to get from Informatica.

The battle lines being drawn up in the analytics market will see Business Objects, Informatica, Cognos, Brio and MicroStrategy go head-to-head, although the market is still in its infancy.

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