Development of China’s business intelligence (BI) market in 2008
BI has become one of the most promising sectors in the global information technology market and is also an important part in the evolution of business information in China. Statistics showed that in 2007, the BI market in mainland China had reached 2 billion yuan (260 million US dollars), 35% more than in 2006, consisting of BI product licenses of 900 million yuan and 1.1 billion yuan BI system integration. There are currently more than 500 BI companies (product developers, integrators, resellers, and service providers) employing about 80,000 employees in China.
BI is generally known as software solutions that can gather existing business data into appropriate knowledge, in order to assist in the decision-making process of a company. BI generally involves the following technologies: data market, data warehouse, user query and reporting, online analytical processing (OLAP), data mining, key performance indicators, and analytical application.
Leading BI Technology Companies in China
Guangzhou Sunnet: Sunnet has been operating for nine years, from the basic multidimensional analytics product BlueQuery2.6 in 2001 to the latest BlueQueryEnterpriseV product for enterprise multidimensional analytical services.
Shanghai Tenly Software: Tenly’s Markway brand products include analytical systems, network mining systems, intelligent reporting, and information testing software. Its Markway analytical system was the first large-scale statistical analysis and data mining software based on the Chinese language with proprietary intellectual property in China.
ADM Software: ADM has successfully completed more than 200 large and medium-scale projects, with relatively sophisticated BI solutions for the financial, aerospace, retail and government sectors. ADM has become a leader in the field of business decision support systems in China.
Beijing Ourway Power Co – This is a fast growing company for small and medium business information business. Its Power-BI business decision analysis system is the first quick-install BI software in China.
Competition landscape
Due to the increasing global M&A activities in 2007, the BI software market from now on will be dominated by IBM, Oracle, SAP and Microsoft, with specialized BI companies such as SAS, Informatica and Microstrategy expected to lead the way. product development in the industry. Currently, local Chinese BI companies have a 36% market share in China, and Chinese BI licenses only account for 6% of total BI license revenue in China.
Advantages of multinational BI
The sources of income of multinational BI companies in China come mainly from the sale of products, technical services and the integration of large-scale projects. Multinationals currently have competitive advantages in data warehouse, data mining, ETL (Extract, Transform and Load), reporting and OLAP, with strong market shares in large projects in the financial, telecommunications, insurance and energy sectors.
Advantages of home BI
China’s local BI companies are making more money from systems integration and product sales, and local systems integration companies have captured half of the systems integration market from the financial and telecommunications sectors. Local BI product developers have made significant progress in 2007, especially Sunnet and Runqian BI reporting products. Although product developers have successfully upgraded their core technologies, the key to their sales achievements last year still lies in cooperative partnerships with downstream integrators and distributors.
Industry growth
The BI markets of the financial, telecommunications and insurance industries had experienced growth rates of approximately 20% in 2007, while growth rates of over 30% were observed in the energy, manufacturing and government sectors. The environment for deploying BI systems on a corporate scale is becoming sophisticated in large enterprises, so it will continue to be an important part of the entire China BI market for the next three years. Midsize companies will be the fastest growing point in the Chinese BI market, as this segment will be in a development phase in the next three years. Small business BI systems are still in an early stage and are expected to be maturing within five years. Overall, demand for BI products in China will enter a rapid growth phase in the next five years, with an estimated value of 5 billion yuan, followed by another three-year post-expiration extension period.
BI software can be implemented more independently in large Chinese companies, while BI capabilities in small and medium-sized companies may have to rely on management software such as ERP and CRM. Therefore, it is expected that there will be an increasing number of BI products integrated into ERP and CRM management software as complementary capabilities. But in the long term, BI developers in China should pay more attention to operational BI products.
The biggest limitations to popularizing BI products are their high prices and lack of support talent. While industries such as finance, telecommunications, insurance, energy, and electricity may rely more on BI capabilities, companies in other industries may require relatively smaller BI investments. The entire BI industry in China is expected to become more competitive, lowering the overall price level. Therefore, there would be a higher volume of BI license sales, but the growth of the total sales value can remain relatively stable.
Segment market demand analysis
Demand for BI products from different segments can change over time, and the performance results in 2007 were as follows:
OLAP and reporting products: Reporting is a core aspect of BI capabilities, and OLAP multidimensional analysis is a standout feature of BI. Although OLAP and reporting products accounted for 45% of the BI market, this segment was highly competitive, with multinational players capturing more than 80% of the shares.
Data Warehouse Products: Data Warehouse and Data Marketplace products were another base for BI projects, accounting for 40% of China’s BI market, with foreign vendors occupying prominent market positions.
ETL and data integration tools: Although ETL and data integration accounted for 40% of a typical BI project, ETL tools only had a 9% market share in China. Many applications are still based on manual coding methods in China, which means that it will take some time for ETL tools to become popular.
Data Mining: Data mining technologies, with a market share of 3% in 2007, have matured relatively now, but a lack of technical support experts is hampering their uptake.
Other products, such as performance management, KPIs and metadata, together had a 3% market share in China last year.