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IBM Leads Data Warehousing's Growth

IBM leads the business intelligence and data warehouse market, which is expected to reach $113 billion by 2002, according to World Research Inc., San Jose, CA, a hi-tech market research firm in its report released this month.

IBM revenues grew 77 percent over 1997 to $4.25 billion in 1998, accounting for nearly 20 percent of the worldwide business intelligence and data warehouse market. Other leading vendors that offered service, systems and software include Compaq, Hewlett-Packard, Oracle, NCR, Sun Microsystems, SASI and Andersen Consulting/Arthur Andersen.

The top eight companies accounted for nearly 43 percent of the worldwide business intelligence and data warehouse market.

Michael Burwen, director of the BI/DW program at World Research, said the business intelligence and data warehouse space is growing at an average rate of 50 percent because companies are finally starting to realize that these applications can help companies “either operate more efficiently, or get more revenues.”

The company's “1999 Business Intelligence and Data Warehousing Program Competitive Analysis Report” surveyed 375 users at small and large companies, including IT and business managers and developers.

IBM's servers are the dominant choice for customers building data warehouses, said another study recently published by the META Group's Silicon Valley Research Center, San Francisco, called “1999 Data Warehouse Marketing Trends/Opportunities,” which also reported a surge in demand for data warehouses. The study includes quantitative information on more than 2,500 data warehouse projects in Global 2000 businesses.

“IBM's excellent showing in the data warehouse server market is a result of its solutions approach and wide selection of scaleable platforms, which combine to give customers choice and a more rapid return on investment,” said Aaron Zornes, executive vice president and director of Application Delivery Strategies at the META Group.

The META Group predicts that by the end of the year, 30 percent of data warehouse sites will exceed one terabyte of data, the equivalent of nearly 700,000 fully-loaded floppy disks.

“Study participants reported a doubling in the size of data warehouses and an increase of 150 percent in budgets,” Zornes said. “This year's largest growth area will be the high-end market segment.”

Data warehouses are growing in size, said Zornes, not necessarily because they are processing more orders within companies, but because they are processing more information about the orders and buying third-party data — like demographic, lifestyle data or credit data — and overlaying it on top of the data they already have.

“Companies are realizing that there is only so much you can do with sampling,” Zornes said. “If you takes samples, you end up smoothing out all of the really interesting pockets of either highly profitable or highly prone-to-churn or prone-to-defect customers. You really don't want to smooth that [data] out, as companies move closer to one-to-one marketing models.”

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