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Shopping Around: Mergers and Acquisitions in BI Market Expected to Increase

by | Dec 9, 2020 | News

With experts predicting an over $10-billion industry growth during 2021 – 2024, players in the BI market will be busy in the mergers and acquisitions (M&A) front. Despite a relatively quiet time in 2020, experts are forecasting more M&A deals in the industry within the next few years.

Following the acquisition of Looker by Google and Tableau by Salesforce last year, large scale consolidations in the BI market slowed down. Until last month the news broke out that TIBCO is acquiring Information Builders, Inc (IBI). Some say this may be the beginning of a new wave of acquisitions in the market.

According to a Forrester analyst, Boris Evelson, the BI technology is getting commoditized. This means smaller independent organizations will find it harder to compete with large enterprises. This will bring down the prices and create more pressure. Subsequently, M&A deals will be happening.

Potential candidates

There are independent BI vendors left, such as Yellowfin, Sisense and MicroStrategy, for example. With the consolidation trend taking off, these vendors might be the targets for acquistions.

“Yellowfin and Sisense are both interesting tools,” Wayne Eckerson, founder of Eckerson Group, said.

“I think they’re both doing very well and I could see both being acquisition targets. I think they’re both happy doing what they’re doing, but if someone throws enough money at them I’m sure they would sell.”

In the case of Yellowfin and Sisense, these companies are particularly attractive because they have built a strong presence internationally. The former is based in Australia and Sisense has roots in Israel.

Who are the buyers?

As analytics has become a key part of any successful business. This means potential buyers of BI vendors won’t necessarily be larger companies from the same industry. Future acquisitions will likely resemble the cases of Looker and Tableau, when large software enterprises merged analytics into their portfolios.

Using the elimination method, we can play with variables and try to guess who might be the next big buyer. Microsoft has Power BI, Salesforce has Tableau, and Google has Looker. This leaves Amazon, which still doesn’t have a major analytics solution. Although Amazon has QuickSight, the service lacks capabilities that other BI platforms offer. Thus, if Amazon decides to get an upgrade, it may start shopping around soon.

Another important trend is that BI is no longer a separate thing that exists on its own. Over the years, it has become a significant part of the enterprise’s ecosystem, embedded into analytics, cloud services and other software applications.

Tags:

analytics | BI
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