A study of emergence of open source IT and comparison with other options

1. Study on Emergence of Open Source BI Tools
Report On
`
Renjith Peediackal (09BM8040)
As Part of the Course ‘IT for BI’
VINOD GUPTA SCHOOL OF MANAGEMENT, IIT KHARAGPUR
May 2011
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2. Study on Emergence of Open Source BI Tools
Contents
Introduction: Different choices of business intelligence solutions......................................................... 3
Proprietary business intelligence tools ................................................................................................... 3
Porter’s Five force Model.................................................................................................................... 4
Industry competition ...................................................................................................................... 4
Threat of substitutes ....................................................................................................................... 5
Threat of new entrants ................................................................................................................... 5
Suppliers bargaining power ............................................................................................................ 5
Customers bargaining power .......................................................................................................... 5
Results of the analysis ..................................................................................................................... 6
Custom Made Business Intelligence Tools. ............................................................................................. 6
Commercial Open Source BI Tools .......................................................................................................... 6
Features [Ref. Website of SQL Power Wabit] ..................................................................................... 7
A comparison between the three options .............................................................................................. 9
Conclusion ............................................................................................................................................... 9
References ............................................................................................................................................ 10
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3. Study on Emergence of Open Source BI Tools
Introduction: Different choices of business intelligence solutions
Business intelligence was a field considered to be very niche and it was dominated by a
few product companies like SAP, Oracle, Informatica etc. As a result, these products are
costly and cater to the needs of the big organizations, who can invest heavily in futuristic
information technology infrastructure.
There are thousands of small and medium scale industries with growing need of
business intelligence. Also there is number of firms, who could have chosen some of the
tools available in the market and now planning to migrate. Basically three different options
are available for these organizations.
1. Go for a proprietary business intelligence tool, customized for their purpose
2. Have a custom made business intelligence solution
3. Or go for commercial open source business intelligence
Each of the above options has its own merits and demerits. In this paper the author is trying
to explore the details and draw a comparison between them.
Proprietary business intelligence tools
Proprietary business intelligence tools are well established in terms of customer needs, and
planned innovation. Also they are benefitted by a ‘network effect’ with ready availability of
consultants, integrators. Outsourcing firms also has gathered enough experience in this
area, which cut the cost of customization drastically.
More over many of the products in the market can boast of a stabilized application which is
fully tested. Also the capabilities and features needed to cater every industry have been
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4. Study on Emergence of Open Source BI Tools
developed very well over time. And the manufacturers of these tools have ensured flexible
integration with other tools.
Porter’s Five force Model
Industry competition
Many of the new companies have emerged strongly in this field. The industry rivalry is
increasing heavily and as a result need for innovation and focus is increasing. And, sooner
the software will become commoditized and the developers won’t be able to reap profits
Many of the proprietary bi power houses have innovated products and focus on some areas
where they have developed core competencies. A few examples below will show case the
increased competition which results in high quality products with much customer focus.
1. ABIBA is focussing on Telecomm sector and have won many accolades Red Herring
Asia award in 2010
2. Annik Technlogies focussed on health care and life sciences business.
3. Persistent technologies focuses on predictive business intelligence for life sciences
4. Microstrategy extended BI solutions to IPhones and IPads by developing
Microstrategy Mobile
5. Informatica has modified its BI software so that it can work with Cloudera’s hadoop
distribution
6. Sybase had specialization in Telecom, BFSI and retail. And SAP acquired Sybase to
extend its umbrella of services to all sectors
7. Oracle is trying to widen it horizons through acquisitions and consolidations
8. Teradata focus on Telecom BFSI and aviation
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5. Study on Emergence of Open Source BI Tools
9. SAS institute has core competency in government sector.
10. QlikView has made mark in business intelligence for manufacturing sector
So the above list makes us think that there is hardly any space left for other options. But this
model of customizing a tool off the shelf cannot cater to all the business intelligence needs
of today’s industry
Threat of substitutes
Open source BI is a powerful substitute for traditional BI vendors. And simpler businesses
can be can be catered by even spread sheet applications.
Threat of new entrants
The entry and exit barriers are low in this technology based industry. One has to expect
more and more competitors every year.
Suppliers bargaining power
The basic technology like programming platforms is supplied by technology giants. So there
is a huge power for the suppliers. But at the same time, there are smart choices and
innovative ways of reducing the dependency of technology vendors.
Customers bargaining power
Most of the customers are upset by a number of business intelligence projects, which are
failed to be effective. Since most of the organizations are big corporate, they will be able to
bargain on the value proposition and bring down the value of the software. And for small
and medium firms, how much the big vendors can cut their price to give a balanced value
proposition is a complex problem.
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Results of the analysis
Business Intelligence industry is a good place for small and agile players to emerge fast. So
there is a strong case for open source business intelligence tools to flourish in the near
future. It gives a compelling reason to understand the options other than proprietary
software.
Custom Made Business Intelligence Tools.
Take the example of a company which is formed by the merger and acquisition of
many other smaller companies. Some of the firms can still retain the process of pre merger
state of affairs. Or take the example of a service provider who has to change their service
offering frequently. Also they have to change their processes frequently to adjust to the
market movements. In such cases, customizing a tool might be gargantuan task and mostly
it might be unproductive. Such kind of detailed customization can be provided by making a
business intelligence tool, using some programming languages like PL/SQL. Many of the
software service providers currently undertake projects to create and maintain custom
made BI solutions. But the challenge is that as and when the organization grows, the
complexity of the software increases, and it becomes tough to handle. Also changing the
software vendor becomes another headache, because they possess, knowledge regarding
intricacies of the tool. At a later stage it won’t be easy to get consultants and integrators.
Commercial Open Source BI Tools
The financial pressure is forcing many of the firms to accommodate low cost solutions for
their information needs. And this trend has benefitted the advent of Commercial Open
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7. Study on Emergence of Open Source BI Tools
Source BI Tools. Many of the users argue that, success of Business Intelligence does not
depend on tool but the communication skills of the people who use them and the
organizations capabilities to adopt to new situations. So they argue that BI tools have been
already commoditized.
Also tools like ‘Pentaho BI platform’, ‘SQL Power Wabit’ and ‘Palo worksheet’ has
accelerated the acceptance of this open source tools. In addition to standard reporting they
have the features of ad hoc reporting, OLAP capabilities and dashboards. Also the vendors
provide full commercial support.
Please see the features offered by SQL Power Wabit. They offer less complexity and
something that is cheaper and easy to work around.
Features [Ref. Website of SQL Power Wabit]
• Standard Reports
• Custom Dashboards
• Ad-hoc Queries
• Line, Bar & Pie Charts
• Drill-down OLAP cubes
• Real-time BI Reporting
• Easy to use drag & drop interface
• No SQL knowledge required
• Open Source, Free Download
• Report Scheduling/Bursting
• Fine-grained security
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8. Study on Emergence of Open Source BI Tools
• Thin-client web access
‘Palo worksheet’ claims that already 45000 installations are done and 400 downloads per
day is currently happening. Pentaho has 80% growth in current financial year compared to
last year.
That makes writing on the wall clear. More and more organizations will be move into open
source BI platforms in the future. And it provides a good business opportunity for open
source BI companies.
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9. Study on Emergence of Open Source BI Tools
A comparison between the three options
Parameter Proprietary BI Custom Made Open Source
Support and Limited access to consultants,
maintenance are separateknowledge and training.
projects to be run. Documentation from multiple
Quality of these depend sources makes it complex. But
up on the service the scenario is gradually
End User Support Availability of timely help desk provider.
and technical support improving
Greater cost of installation and
customization. Total life cycle
Saves costs in training and cost might not assured to be far
Total cost of ownership
implementation Depends on the complexity of the software
lesser.
High innovation is possible
The focus might not be because of availablity of code
on innovation because and community method of
Architectural upgrades are lack of a proper product developing. But difficult to keep
planned and executed at development stability and dependablity along
Innovation regular basis environment with innovation
This is too much to ask
from a run of the mill This is an issue still to be handled
Vendors are committed to software service by most of the opensource
Interoperability interoperability provider. vendors
Easiness of integratioinhigh
Very Low High
Security and A survey conducted by San
adminstration should be Mateo quote that Open source
taken care while coding. tools should have improved
Security and This issue has been aleady Difficult to monitor adminstration and meta data layer
administration addressed these aspects and also security support
This is a major challenge
to achieve high quality
of docmentation. No
pblically available
Standardized user and docmentation. Create Adequate and accurate technical
technical documentation dependancy to service and functional documentatin have
Documentation available provider to be achieved
Conclusion
Commercial open source business intelligence tools have been rising in their status
in the previous years. And for small and medium enterprises, they provide accessibility to an
easy and cost effective way of business intelligence. Many of the big companies might stick
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to the proprietary software because of the support services, standardization and the
dependability factors. Also these vendors have incorporated vast amount of domain
expertise in their tools, which enables them to provide more personalized solutions to the
needs of different industries and organization. And if a firm has largely different business
process or enormous complexity, which will not be handled by the off the shelf tools, they
can opt for a custom implementation.
From a consulting perspective, it will be profitable to partner with open source
business intelligence vendors since they are having a good value proposition to small and
medium scale businesses which is large segment.
References
1. http://dqindia.ciol.com/2011/feb/cio_08.jpg
2. http://searchbusinessanalytics.techtarget.com/news/2240022622/Buyers-Guide-Selecting-
the-best-business-intelligence-BI-tools
3. http://www.elegantjbi.com/Resources/businessintelligence-whitepaper-BI-for-small-
medium-enterprises.htm
4. http://www.sqlpower.ca/consulting/page/marketOverview
5. http://www.sqlpower.ca/page/wabit
6. http://www.jedox.com/en/home/overview.html
7. http://www.pentaho.com
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