Slowdown on the cards for business intelligence

The market for business intelligence (BI) tech is predicted to slow down following the strong growth seen over the past few years.

The BI market is forecast to have grown by 12.5 per cent during 2007 by analyst house Gartner. This is slightly lower than 2006 and Gartner predicts a further decline to single digit growth in the next few years.

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Despite the slow down, Gartner says BI is still a critical tool for insight and making decisions and predicts the market will hit $7bn by 2011 with a five-year compound annual growth of 8.6 per cent.

The analyst blames the market slowdown to the consolidation of BI vendors, the increasing maturity of the market and price erosion through competition.

There were a number of significant acquisitions during 2007, including Oracle buying Hyperion, SAP putting in a bid for Business Objects and IBM staking a claim for Cognos.

These deals will eliminate all larger publicly traded BI companies, meaning two-thirds of the BI market could be covered by these 'mega-vendors'.

Dan Sommer, a senior research analyst at Gartner, said consolidation by the big names should "accelerate value derived from BI".

He added large vendors will drive BI uptake while new players will bring in new tech to fill any gaps left by the mega-vendors.