China Business Intelligence (BI) Market Development in 2008
BI has become one of the most promising sectors in the global information technology market and is also an important part of the evolution of enterprise informatization in China. Statistics show that in 2007, the BI market in mainland China reached 2 billion yuan (US$260 million), 35% more than in 2006, consisting of 900 million yuan of BI product licenses. and BI systems integration for 1.1 billion yuan. There are currently more than 500 BI companies (product developers, integrators, distributors, and service providers) employing about 80,000 employees in China.
BI is generally referred to as software solutions that can compile existing business data into suitable knowledge, to aid in a company’s decision-making process. BI typically involves the following technologies: data mart, data warehouse, user query and reporting, online analytical processing (OLAP), data mining, key performance indicators, and application analytics.
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 product BlueQueryEnterpriseV for enterprise multidimensional analytics services.
Shanghai Tenly Software: Tenly’s Markway brand products include analytical systems, network mining system, intelligent reporting and information testing software. Its Markway analytical system was the first Chinese-language-based large-scale data mining and statistical analysis software with proprietary intellectual property in China.
ADM Software: ADM has successfully completed more than 200 medium and large-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 the business informatization of small and medium-sized enterprises. Its Power-BI business decision analytics system is the first quick-install BI software in China.
competitive landscape
Due to increased global M&A activities in 2007, the BI software market will henceforth be dominated by IBM, Oracle, SAP and Microsoft, with BI specialist companies such as SAS, Informatica and Microstrategy expected to lead. 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 the total BI license revenue in China.
Advantages of multinational BI
The revenue sources of multinational BI companies in China come mainly from product sales, technical services, and the integration of large-scale projects. Multinationals currently have competitive advantages in data warehouses, 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 national BI
Local Chinese BI companies make most of the money from system integration and product sales, and local system integration companies have captured half of the system integration market in the financial and telecom sectors. Local BI product developers made significant progress in 2007, especially Sunnet and Runqian’s 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 experienced growth rates of approximately 20% in 2007, while growth rates of more than 30% were seen in the energy, manufacturing, and government sectors. The environment for implementing corporate-scale BI systems is becoming sophisticated in large enterprises, so it will remain an important part of the entire China BI market for the next three years. Midsize companies will be the main growth point in the Chinese BI market, as this segment will be in a development phase in the next three years. BI systems for small businesses are still in their infancy and are expected to mature within five years. Overall, the 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 years of 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 still 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 run, BI developers in China should pay more attention to operational BI products.
The biggest constraints to popularizing BI products are their high prices and lack of supporting talent. While industries such as finance, telecommunications, insurance, energy, and electricity may rely more heavily 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 value of sales may remain relatively stable.
Segment market demand analysis
The demand for BI products from different segments can change over time, and the performance results in 2007 were as follows:
Reports and OLAP products: Reports are a core aspect of BI capabilities, and OLAP multidimensional analysis is a prominent feature of BI. Although OLAP and reporting products represented 45% of the BI market, this segment was highly competitive, with multinational players capturing more than 80% of the shares.
Data warehousing products: Data warehousing and data mart products were another foundation for BI projects, accounting for 40% of China’s BI market, with foreign vendors holding prominent positions in the market.
Data integration and ETL tools – Although data integration and ETL represented 40% of a typical BI project, ETL tools only had a 9% market share in China. Many applications still rely on hand coding methods in China, which means it will take some time for ETL tools to catch on.
Data mining: Data mining technologies, with a 3% market share in 2007, are now relatively mature, but a lack of technical support experts is hampering their uptake.
Other products, such as performance management, KPIs and metadata, had a combined 3% market share in China last year.