Business Objects' swoop for Cartesis continues a consolidation trend in the business intelligence (BI) and corporate performance management (CPM) markets that shows no signs of abating. CPM is still a relatively immature market compared to BI. Most of the corporate spending on CPM (two thirds according to some estimates) is on services rather than software, which means that companies are still not getting enterprise CPM from a single vendor and continue to deploy and integrate multiple CPM applications from different vendors. As a result CPM vendors are now keener than ever to grow their suites either organically through internal development or (more likely) via merger & acquisition to provide enterprise-wide coverage and functionality.
The consolidation also shows the convergence between BI and CPM in a single platform umbrella. All the major BI players today equally market themselves as CPM players. And every CPM vendors combines their applications with a BI platform, a transactional platform, or both.
Yet the jury is still out on whether customers today are really looking for a single platform? After all CFOs and CIOs have radically different agendas. Many companies still regard BI and CPM as separate initiatives, run and managed by different people, even though they might be linked technologically.
The reality is that CPM consolidation is being driven by software vendors that want to expand the functionality of their offerings, bolster their declining BI tools revenue streams, and possibly increase their buyout price.
The latter is becoming an increasingly likely exit strategy for the remaining niche CPM vendors like OutlookSoft or Longview or Clarity as the market expands and matures. But that doesn't necessarily mean the end of the independent CPM market. Like the BI and ETL marketplaces, niche CPM vendors can only grow to a certain size when they're up against the larger software incumbents. SAP, Microsoft, IBM and others are also expanding their BI and CPM offerings and are formidable competitors. They are on the prowl for acquisitions as you read this.
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