Small and midsize customers formerly had limited choices if they wanted to implement business intelligence (BI) solutions beyond a spreadsheet. Most BI software was aimed at large enterprises -- which meant it was expensive, complex and often difficult for IT-challenged SMBs to use.

Not anymore. Over the last two years, business intelligence suppliers such as Business Objects, Microsoft and Oracle have moved into the SMB market in a big way, offering lower-cost packages that are simpler and easier to use.

"Because the enterprise market is becoming saturated, BI manufacturers are targeting their solutions to smaller companies to increase sales," says Diane Lees, senior category manager for software strategy at Ingram Micro. "They also are liberalizing their channel programs and lowering barriers to entry." These factors mean opportunity for database-savvy solution providers targeting SMBs.

BI Market Explosion
"The Fortune 500 all have some form of business intelligence, so the real growth opportunity is among small and midsize companies," says Todd Rowe, VP and general manager of midmarket business at Business Objects. The potential is large. Rowe cites IDC statistics reporting that of the $5.9-billion BI market last year, about 35 percent was in the midmarket. In addition, Business Objects estimates that the midmarket is growing faster than the enterprise, at 12.5 percent annually vs. 8.3 percent.

At the same time, BI has become a high priority for many SMBs. Research firm Gartner has been polling midmarket CIOs for years on technologies they plan to purchase in the next year. "Four years ago, BI was just an afterthought," Rowe says. "Three years ago, it moved from 13 to 10. Two years ago, it moved to number two and now it’s number one." Executives at SMBs want BI software for its analysis and reporting capabilities, says Lees, so they can better comply with government regulations and make better business decisions.

"SMBs are buried in data from so many sources," says Howard Hammerman, president of solution provider Hammerman Associates. "They know the data that can give them an edge is in there, somewhere." Hammerman jokes that BI does what Michelangelo did with his famous statue of David: When asked how he created such a masterful work, the artist replied that all he did was "take away the stuff that was not David."

Today's BI solutions are often more than just sophisticated database or reporting technologies, notes Alan See, senior VP and research director at Aberdeen Group. They can blend structured and unstructured information -- analyzing unstructured data such as text from call centers and blogs -- and combine it with sales data to produce a more complete customer profile. "At companies of any size," says See, "executives are looking for that piece of information that can bring a competitive advantage."

Choosing Wisely
With many manufacturers targeting this space, it pays to drill down into their products as well as into their channel strategies. "Many channel programs are of soft clay," says See. "They are learning as they go." In fact, channel strategy could be even more important than the actual product, he says. "Applications leapfrog each other all the time in terms of bells and whistles, but they're all competitive in terms of usability."

• Microsoft’s Katmai.Microsoft is hoping for such a leap with the planned 2008 release of Katmai, the next version of SQL Server. Microsoft entered the BI market with SQL Server 2005, which includes BI functionality as part of the regular per-processor licensing cost. Katmai promises to expand the capabilities and ease of use by adding large-scale data warehousing, richer information delivery and closer integration with Microsoft Office and SharePoint technologies.
  "By fundamentally changing the economic model for BI and delivering unprecedented ease of use, we're enabling the broadest deployment of BI possible so employees can better contribute to a company's overall business performance," says Jeff Raikes, president of the Microsoft Business Division.
• Oracle's SMB Push. Oracle, too, is taking big steps to broaden the appeal of its BI solutions. In June the company introduced Oracle Business Intelligence Standard Edition One, an integrated BI and data warehousing system that's packaged, preconfigured and priced to meet the needs of SMB organizations. Featuring core BI capabilities, including the Oracle database, the package runs on a single server and is available for deployments of five to 50 users at $1,000 per user.
  Oracle also has liberalized its partner program for SMBfocused VARs. The Oracle VAD Remarketer Program allows new resellers to source Oracle SMB Technology products, including BI, through authorized Oracle value-added distributors such as Ingram Micro. It does this without requiring them to join the Oracle PartnerNetwork or pay the typical upfront fees. "In the past, only larger, enterprise resellers were able to invest in building an Oracle practice," says Jodi Honore, vice president, vendor management, software, at Ingram Micro. "Now, the start-up costs with Oracle have been eliminated, so all of our resellers are able to participate in growing a profitable Oracle business."
• Business Objects Crystal Decisions. In February, Business Objects created the Crystal Decisions division, enhancing both its midrange products and channel program. According to Rowe, the Crystal Decisions line is simpler to use; integrates the BI features SMBs are likely to need, such as reporting, dashboards, query and analysis; and is up to 70 percent less expensive than the company's enterprise-level products.
  Rowe notes that Business Objects is working to ensure that channel partners profit from midmarket opportunities. The division has started a program through which resellers can design and build their own solutions for a particular vertical industry to work on top of Crystal Decisions. "The partners own the intellectual property, and they determine what the pricing is and to whom they wish to sell it," says Rowe. "This gives them an incremental revenue stream. It also provides differentiation from competitors who simply sell business intelligence by itself."

In fact, deep vertical market expertise is an excellent entrée into BI, experts say. Such knowledge equips solution providers to customize features such as dashboards to deliver exactly the information customers need -- an advantage that benefits customers and is attractive to BI suppliers. "If you've got that," says See of Aberdeen Group, "it makes sense to leverage it and make sure your vendor partner knows that you have it."