Business intelligence is increasingly seen as core to enterprise strategy. To stay competitive, SAP, Oracle and IBM needed business intelligence offerings to complete their portfolio, but recognized that they would never catch up if they created those offerings organically. So they have extended through acquisition, says Hagerty. Business Objects, Hyperion and Cognos—all strong companies—allowed the larger software vendors to gain market presence and a large customer base quickly. The deals were natural extensions, he says.

The consolidation itself is simply the natural maturation of the business intelligence market, says Hagerty, who points to the ERP market, which underwent the same consolidation.

Helena Schwenk, senior analyst at the consultancy Ovum, agrees: "I think IT as an industry is maturing and likewise the BI sector within the IT industry is maturing. Market consolidation is a natural evolution. There was only so far the independents could take the BI market by itself." She thinks the larger players can take the BI market to the next phase—mainstream and operational. Such growth is only possible with the backing of large players.

What BI Market Consolidation Means for You

It's too soon to tell, says Hagerty. So far, "it's a non-event. There's a lot of things that could happen to make it go either way [positively or negatively]."

Schwenk thinks all three companies must make customer communications a priority to alleviate some of the fear and uncertainty that naturally arise. Among the concerns that should be addressed: their product roadmap, integration issues and how support will play out over the next few years.

As for customers, Hagerty thinks existing customers will continue to be supported and will see no changes. "Only when new prospects come will things change," he says, "they'll be told to buy SAP or Oracle or IBM." In other words, complete offerings may mean less choice, says Colin White, founder and president of BI Research. Consolidation will likely mean lock-in. So far these companies say they'll maintain their independence, he says, but inevitably there will be conflicts for Cognos' customers who want to use Oracle, for example. "Inevitably they will become more integrated and you'll be pushed into buying the whole stack." If you're an Oracle customer that might be more of a concern, but SAP isn't such a big issue because you're probably using IBM anyway."