Slow recovery doesn't hurt analytics growth: Gartner

Technology service providers earned $1.65 billion in revenue from analytics applications last year, a 17.7% increase compared with 2009, according to a Gartner report. Analytics revenue will increase 10.5% in the next five years, according to the research firm.

Strategic corporate projects that were put on hold in 2009 but completed last year boosted the analytics industry in 2010, the report noted.  

Dan Sommer, principal research analyst at Gartner and the report's author, predicted that the industry will continue consolidating as large vendors make acquisitions similar to those completed by IBM last year, when the technology services company acquired Netezza, Clarity Systems and Coremetrics.

“Analytics is the fastest growing software segment,” Sommer told Direct Marketing News. “Functionality is maturing for customer churn analytics, and the software is becoming more domain-specific for each industry.”

CRM vendors IBM, Microsoft Corp., Oracle, SAP and SAS Institute were among the 150 companies analyzed in the report. It estimated that German software company SAP generated $2.4 billion in business intelligence revenue in 2010, the most of any company in the business intelligence segment, of which analytics is one part. Gartner estimated that SAP controls 22.9% of the industry's market share.

Redwood Shores, Calif.-based Oracle trailed SAP in revenue and market share by $800 million and 7.3%, respectively. Gartner estimated that approximately 100 of the 150 vendors analyzed did not record more than $10 million in business intelligence revenue in 2010.

Gartner classifies analytics as a sub-segment of business intelligence. It defines business intelligence as including the applications, infrastructure and tools that help brands improve decisions and performance.

The company compiled the report using data from vendors and its more than 10,000 end-user clients. The company also used information from public filings.