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The rise of analytic packages

• By Wayne W. Eckerson
• December 31, 2002

There has been a great deal of talk about and interest in packaged analytic applications recently. There is a race among vendors to duplicate SAP's success in operational applications and become the ''SAP of analytic applications.'' Business Objects, Informatica and Hyperion, as well as ERP giants like SAP, PeopleSoft and Oracle, have delivered domain-specific analytic packages that provide 65% to 85% of a finished application.

Although analytics packages may be the talk of the town today, most organizations still build analytic applications by a 2-1 margin, according to a recent TDWI report titled The rise of analytic applications: Build or buy? (To download the full report, go to www.tdwi.org.)

The burden of maintaining code
Today, most organizations that build analytic applications write a lot of code to surround an analytical tool, such as Business Objects WebIntelligence. In fact, half of the organizations surveyed by TDWI reported that in-house code represents 50% or more of their custom analytic applications. The hand-written code typically provides the organization's look and feel, integrates the tool into a corporate portal environment, or adds missing functionality.

It is a huge burden for organizations to develop and maintain custom code over time. As a result, many organizations are eager to ditch in-house development and migrate to packages. Not surprisingly, the percentage of organizations that are ''interested'' or ''very interested'' in purchasing packaged analytic applications will increase from 47% to 62% in 18 months. In addition, the ''negative rating'' of analytic packages will plummet from its current 43% to 19% in 18 months. Clearly, many companies would like to avoid writing code if at all possible.

Accelerating time to insight
Although packages are gaining momentum, there is a new breed of development tools that give organizations a way to accelerate the deployment of custom-built analytic applications and make them easy to upgrade. Called analytic development platforms, or ADPs, these tools offer ''plug-and-develop'' capabilities that enable developers -- or even savvy business users -- to build sophisticated applications with a unique look, feel and functionality in a matter of days or weeks.

AlphaBlox, arcplan, Proclarity and Business Objects are some of the companies delivering first-generation ADPs today.

''I've never seen anything out-of-the-box that gives us what we want,'' said Rick Stevenson, director of financial systems and supply chain at GAF Materials Corp. in Wayne, N.J. Stevenson uses arcplan's Dynasight to develop and maintain an analytic application for the sales department. ''Our [analytic development platform] is very easy to use and requires no coding,'' he said. ''I had a request for a significant enhancement yesterday and I built the new functionality in one hour.''

ADPs are a new breed of analytical tools that expose their object models in the form of graphical, configurable components, such as chart, grid, sort, filter, query and access control components. Developers can drag and drop the user interface components onto a graphical workbench that facilitates WYSIWYG development. The client and server components can be easily customized using pop-up dialog boxes and options for creating scripts, if needed.

Most ADPs run against multidimensional databases, such as those from Microsoft, Hyperion and Oracle, but a growing number also work directly against relational data in a data warehouse or data mart. For example, Business Objects now sells Application Foundation for building custom analytic applications. And MicroStrategy is migrating its toolset to support a greater degree of customized development.

The best ADPs support sophisticated query engines that can dynamically display from disparate systems as distinct objects (such as charts, tables or graphs) in a single report on the user's screen. In addition, many analytic development platforms come with pre-defined models and reports for building applications in specific domains that developers can leverage to accelerate development.

Re-creating the EIS of old
In many respects, the emerging analytic development platforms are re-creating the ''executive information system'' (EIS) of the late 1980s, which provided compound graphical reports, including charts, tables and documents, for top executives. The difference is that those early EISs ran on mainframes and were hand-coded by a team of developers dedicated to supporting the executive office.

The main difference between EISs and ADPs is that ADPs run on standard operating environments and don't require a team of developers to support and maintain them. In fact, ADPs take custom coding out of the process, greatly accelerating deployment times, or ''time to insight.'' In addition, ADPs make it possible for organizations to rapidly deploy EIS-like applications to all users, not just executives.

Build and buy
ADPs fulfill a need that exists in most organizations to deliver robust functionality in a customized environment. Packages also make this promise, but many organizations so far have failed to gain the benefits of packaged analytic applications because they spend too much time customizing the packages. This leaves an opening for ADPs to fulfill the majority of organizations' analytic needs.

More than likely, however, organizations will pursue both a build and buy approach. And vendors will meet these needs. Packages will contain ADPs to rapidly customize the program to meet user needs and navigate the shoals of version upgrades. ADPs will come with more robust domain-specific models and report templates to accelerate custom development.