Each year, industry analysts, experts and vendors bombard us with acronyms for the next big trend. There are several ways to examine these trends to determine if you should jump on board.
First, ask yourself if the trend is real or just the next pet rock. Is it being used by early adopters or merely by companies conducting R&D to determine if there is any real value? If it is real, will it have an impact on the industry this year, or will it take several years? And will that impact be incremental or revolutionary?
Second, remember that a solution may be appropriate for the Fortune 500 market or the small to midsized business (SMB) market, but not always both. Although trends are pitched to everyone, the reality is that some are a better fit for large firms while others will be adopted by the SMB market.
Finally, notice the quietly evolving trends that are not being hyped by industry pundits. The trends you don’t read about in the industry trade press might just be the ones that are having the biggest impact on corporate performance management (CPM), business intelligence (BI) and data warehouse (DW) implementations.
Service-oriented architecture (SOA). Very, very hyped. Also very real and will become pervasive. But SOA will significantly fall short of hyped expectations in the near term. It will take the second or third generation of SOA-enabled applications before its potential will be felt.
SOA is strikingly similar to the shift to client/server in the early 1990s and the Web in the last decade. Those shifts were sold as “game changers” if all you did was use these new technologies. But, these technologies are enablers, not the killer apps they were described to be. The first iterations of applications using client/server and the Web stunk. As with the Web and client/server, just putting an SOA front end into a monolithic, legacy application does not eliminate the application’s underlying limitations; it just hides them. Client/server and Web applications finally made an impact when the underlying applications were rewritten to really leverage the new technology.
Software vendors may embrace SOA in their marketing campaigns but are building software stack solutions that will inhibit SOA’s usefulness, particularly for enterprises that use solutions from multiple vendors.
Software as a service (SaaS) or on demand. Salesforce.com has legitimized this trend in the enterprise application market, but the impact may be different for data integration (DI) and BI. The DI market is less likely to embrace on demand if the underlying architecture requires on-premise data being transformed off premise via the on-demand software. Performance and security concerns will limit its use for DI.
It may be a different case for BI, where on demand may offer a very compelling total cost of ownership (TCO) case and enterprise data stays within its firewall, so security does not restrict adoption. However, performance may still be an issue. If the top-tier BI vendors provide their software as both on demand and on premise, then this trend may become significant for all size firms.
Open source software (OSS). OSS has had a profound impact in the IT industry. Linux and Apache are used extensively. But will database, extract, transform and load (ETL) and BI OSS offerings impact the DW/BI markets? Despite solid functionality, OSS may expand the DW/BI marketplace but is not likely to displace existing BI/DW vendors soon. It took Linux years to take off. OSS may also take a while in the DW/BI market. Although many of my clients have decade-old database applications from long-gone vendors, they still cannot justify the cost or risk of migrating to a new platform.
The biggest potential for OSS is either in smaller firms that have not made any significant investment or established (vested) expertise in databases, ETL or BI, or at firms that are replacing data shadow systems but don’t have the budget for commercial software. The countertrend, which I’ll write about in the next column, is database bundling.
DW appliances. Appliances are generating buzz for reducing the complexity and cost of DW/BI implementations. Many early adopters are successful. Aimed at large corporations rather than the SMB market, there are two inhibitors to significant adoption rates. First, DW appliances run counter to the IT standardization trend that has been strong over the past several years in large enterprises. Second, large firms are generally not new to DW and have developed success and momentum with their current implementations. Although they may be frustrated with their current DW, would they really drop everything they have for this new platform? That may be too much risk for them to undertake.
Master data management (MDM) and customer data integration (CDI). MDM and CDI are hyped in a big way. ERP vendors and new MDM/CDI specialists are emerging to offer solutions. But most of the MDM/CDI market currently is systems integration rather than software sales. The critical success factors for reference data management, the cornerstone of both MDM/CDI, are people and processes rather than products. A cynical view would be that new software solutions may result in new data silos, which is the exact opposite of their intent. A combination of people, processes and products (new or old) may lead to success, but product-only solutions (silver bullets) will only result in a shortfall in expectations and business ROI. In the next column I look at some trends that are under the radar.