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Sector Outlook, Fourth Quarter, 2003

We view analytics in a very broad way: any technology that helps you gather and arrange existing information so that you can make better decisions is an analytic technology in our view. That includes portals, visibility tools, content management tools, reporting tools, "performance management" tools, and of course data warehousing tools.

In the fourth quarter, all of these are hot areas. Unfortunately, in many cases, they are hot for much the same reason that property for garbage dumps is hot in a growing urban area. There's a lot of stuff out there, and nobody knows what to do with it.

When people say, "Oh, we've got to do something," usually the biggest winners are the people who will get you get off cheaply and easily. For that reason, I think storage and archiving are going to see the most growth among all these applications in the next few years.

At the same time, we are seeing a considerable amount of innovation that is returning real value. We atended a recent Data Warehousing Institute session, and we were surprised at how many people have decided to get their hands dirty and build OLAP tools of various kinds.

Five or ten years ago, the cost of these warehouses would have been so formidable that the interest these people had would have been quickly dispelled when they came up against reality.

These days, though, a number of factors have conspired to reduce costs.

  • Expertise. There is more expertise out there, so the very difficult design problems associated with these applications are less likely to defeat people.
  • Outsourcing. Much of the hard, mechanical work associated with building data warehouses can now be outsourced to India or Russia.
  • Tools. The tools have gotten better. It is now well understood that no data warehouse does you much good if the data in it is bad or out of date. But now, there are fairly good ETL (extraction, translation, and loading) tools that help you out.

What about other analytic tools--reporting, portals, content, or visibility? In our view, while there is significant, justifiable interest in using all these tools to make information more accessible to whoever needs it, there has been no significant change in the capabilities of the technologies for several years.

For that reason, B2B Analysts, Inc., is making data warehousing and reporting a focus area for 2004. We will be doing a thorough investigation of the vendors and of the innovations in this area, and we will be assembling a report to be available in late 2004. As is usual with us, we are asking a small number of customers to sponsor the research; in return, they will get early access to the report and briefings on it.

If you are interested in this report on data warehousing or in our research on analytics, please contact us.