Acquisitions are driving Dell deeper into BI and analytics
Fredrik Tunvall, Analyst, Information Management
Dell has issued a new wave of releases aimed at the business intelligence (BI) and analytics market. Dell’s goal is to chase mid-market firms where BI is a greenfield opportunity.
Winning market share in this highly competitive space will be a challenge for Dell (like any other BI vendor), but its hardware business already has a foothold in the mid-market and it could generate some cross-sell opportunities for software and vertical industry-oriented professional services.
Dell is going after BI and analytics market share
Dell has driven the expansion of its software offering with an aggressive M&A strategy, the most noteworthy being Quest Software for $2.4 billion in 2012. BI and information management have also been targets of Dell’s acquisitions, including Toad, for database management; Kitenga, for Big Data analytics; and Boomi, for data integration.
Dell is targeting a potentially lucrative mid-market segment of the analytics and BI space. The company brings a deep portfolio of solutions, not just for information management but also in the areas of mobility, security, and hardware, that can help IT manage BI and analytics deployments in unison with other IT-driven projects.
This could be a differentiator compared to the likes of MicroStrategy, QikTech, and Tableau, which cater almost exclusively to departmental business users with products that are mostly focused on the front-end.
Kitenga for Big Data analytics on Hadoop
Earlier in 2013 Dell launched Kitenga 2.0, positioned as a Big Data analytics solution, which acts as a wrapper of libraries on top of Hadoop, with a drag-and-drop interface to query, search, and analyze data directly against HDFS, without the need to create and script MapReduce jobs.
With this 2.0 release, Kitenga added support for the Predictive Modeling Markup Language (PMML), sentiment analysis, and enhanced search and data visualization capabilities. By combining search and analytics in a single, unified environment, Kitenga aims to help organizations to process data and provide appropriate context and analysis to solve business problems.
Kitenga eases the use of Hadoop by removing the complexity of writing MapReduce code, which is certainly needed in a still immature, but fast-moving, Big Data market. Unlike Toad, Kitenga is targeted at mid-market to large enterprises, but at $50,000 per seat, this is clearly a tool aimed at a select group of data analysts who deal with large sets of data and understand analytic processes and the output.
Organisations can start small and expand if needed, but broad distribution to everyday business users will be difficult; this class of user will be better off with the Toad BI suite, in particular Toad Data Point.
Toad is already in IT – and can grow from there
When Dell acquired Quest Software it took over control of Toad, a popular relational database management product. Dell has now evolved Toad into a full BI suite. Dell announced the release of Toad Business Intelligence Suite 2.0, with added modules for virtual mash-ups and collaboration (Intelligence Central), query and analysis (Data Point), and visualization (Decision Point). While the tools are integrated, each is aimed at different users, ranging from developers and data analysts to business users.
Dell is heavily touting its self-service capabilities and ease of use, which is meant to appeal to business users. This is a common theme among today’s BI vendors and it will be difficult for Dell to differentiate itself from the likes of Tableau, QlikTech, and Spotfire with data visualization, in-memory engines, and other end-user features.
Instead, Ovum believes Dell should focus its efforts on selling to IT. Dell already has a large installed base in IT departments that use Toad for database management, and it will be vital for Dell to attract these users to expand Toad’s database management capabilities to other BI needs, such as query, analysis, and data visualization.
This is a differentiator compared to many mid-market self-service BI players, such as Tableau and Qliktech, with strategies that are reliant on the ability to get individual business users to champion the product and use that as a proven base to grow within the enterprise, often department by department. However, the issue with the land-and-expand model is that as it grows it can be difficult for IT to manage and this can easily lead to an uncoordinated BI mess.
Often the organization ends up turning to service providers for strategy, which can be at a significant cost. Although both Tableau and QlikTech are working to expand their IT-driven capabilities, such as improved administration features, Dell has a headstart with deeper IT management capabilities. To win larger bids, it will be vital for Dell to tout these capabilities.
The mid-market will also find value in professional services and verticalized solutions
Dell employs a service arm that can help with organizations’ analytics projects. However, Dell’s service division does not possess the analytic depth and manpower that the likes of IBM and Oracle have acquired over the years.
IBM and Oracle also offer vertical-specific solutions (both technology and services), which Dell lacks. Dell faces the same challenge as Microsoft in BI and data warehousing; they primarily provide technology, not consulting or applications.
It will be crucial for Dell to build out its professional service division for analytics and BI as well as spend R&D dollars to continue to create verticalized solutions. This could be another differentiator compared to other mid-market players mostly offering horizontal solutions.