Howard Dresner, president and founder of Dresner Advisory Services, has seen business intelligence trends come and go.
Recently, there’s been a wave of consolidation with Salesforce acquiring Tableau, Google purchasing Looker, and Qlik buying up both Podium and Attunity. But consolidation is nothing new, according to Dresner, who noted that some companies start with the specific purpose of finding an eventual buyer and that a new cycle of mergers and acquisitions comes every few of years.
A veteran of three decades analyzing the analytics industry, Dresner spent 13 years at Gartner where he served as the advisory firm’s lead analyst for business intelligence, a time during which he helped popularize the term. He then moved on to Hyperion Solutions as chief strategy officer in 2005, but when the company was acquired by Oracle he left to form his own advisory company.
With Salesforce’s acquisition of Tableau, Google’s purchase of Looker, and Qlik’s acquisitions of Podium and Attunity, consolidation is an obvious current business intelligence trend, but what does it all mean?
Howard Dresner: First of all, consolidation is not new. I’ve been covering this industry for 30 years now and I’ve watched multiple rounds of consolidation — you could do it almost in a five-year timeline. Most of the vendors would be gone every five or 10 years. A few stick around and can make it for the long haul. In fact, for many companies, that’s the business plan — if you were to read their business plan, there’s an exit strategy, and the exit strategy is usually acquisition, especially if they’re venture-capital funded. So none of this is a surprise. What is a surprise is the valuations. The valuations are very rich, and that simply says that the area of business intelligence and analytics is extremely well valued.
Why are companies paying so much for BI vendors?
Dresner: There’s a real need for it because there’s more and more data. It’s just becoming more and more mainstream. Like I said, I’ve been covering this for 30 years and the notion of business intelligence was this sleepy backwater that no one really understood or cared about. There were a few nerds in the organization that focused on it, but it’s become mainstream. Everybody cares about this now, or if they don’t they should care about it. And of course there’s vastly more data than there ever was before, and so that obviously has the attention of these very large players. What happens with consolidation as you see it play out is that it puts pressure on some of the other vendors in the marketplace — and we won’t mention names — and it may force their hand. If we were to fast-forward five years from now the landscape will look very different than it does today. Clearly, the current consolidation has changed the market dynamics.
Are there vendors you view now as obvious buyers and others you see as obvious sellers?
Dresner: There’s an entire industry that focuses on M&A and potential buyers and potential sellers are always talking. There’s no such thing as an acquisition that comes out of the blue. People have meetings, and then maybe they go away for a while and have other meetings, but everyone is talking to everyone — that’s the reality. Do I think there are others that will get acquired, or that are out there shopping themselves, and do I think there are suitors out there? Absolutely, every day, all year long. The only thing that this latest round of very visible acquisitions does is that it might increase the pressure a little bit. It’s like musical chairs — there are a few less chairs now so it creates pressure. That’s just human nature.
What are some other important current business intelligence trends, and what do they mean for the industry?
Howard DresnerPresident and founder, Dresner Advisory Services
Dresner: The important trends have less to do with technology, and more to do with execution on the part of the vendor. Everyone is looking for what is the next silver bullet — there is no silver bullet. Right now everyone is beating the drum about AI and machine learning, and that’s fine, but that’s not new. What’s different is our capacity to process lots of data quickly. AI and machine learning get better with tremendous amounts of data — more data, less errors. My point is, at the end of the day, the reason you invest in a vendor and technology is so that you don’t have to build it yourself. It comes down to how they serve you, and whether or not they can provide the requisite solutions to your organization and support you appropriately. You trust — and trust is a big word here — that they’re going to make the investment in the technology that’s going to propel you forward and keep your solution up to date, modern, relevant, etc. That’s what gives any vendor staying power — it’s not the shiny object.
As you look at the broad scope of the business intelligence market, what are you most excited about?
Dresner: The data — having so much more data out there, the diversity of data, and being able to build models that get so much closer to understanding reality, a really full perspective — that gets me juiced. We’re all about our data — we collect lots of data, so we’re a bunch of data geeks. Being able to get challenged in our understanding of what’s going on in the marketplace by the data is really exciting. Being able to learn new things about what’s going on in the marketplace in ways that we couldn’t do before — back in my Gartner days we talked to people and it was anecdotal, but it was not grounded in data — to paint a very different picture and more complete and representative picture of the marketplace, that’s what gets me excited. The other thing, from a market perspective, I love that there are so many more users out there, that the technology is so much more approachable than ever before.
Editor’s note: This interview has been edited for clarity and conciseness.