Interesting Facts & Insights from Business Intelligence History

Ever wondered about the origins of business intelligence? Who coined the BI term? Who sold the initial BI software? Discover how historical insights shape BI’s future.

Business Intelligence (BI) has become an integral part of many organisations in today's data-driven world. BI enables the generation of insights, which improves performance and provides a competitive advantage. Google Trends reveals that since 2017, interest in business intelligence has surged significantly, and this trend continues to grow to this day.

But when was business intelligence actually born? Who was the first person to coin the concept of business intelligence as we know it today? Who were the first vendors of BI software? Exploring historical milestones can offer valuable insights for both the present and future of BI.

Keep reading to find out:

• Key milestones in BI evolution
• Lessons from BI history
• Current state of the BI market
• What’s next for BI?
• Final thoughts

Key Milestones in BI Evolution

#1: The first known use of BI term was in 1865

The first known use of the term business intelligence is related to Cyclopædia of Commercial and Business Anecdotes by Richard Millar Devens, published in 1865. Devens used this term to describe how Sir Henry Furnese gained profit by receiving and acting upon information about his environment, prior to his competitors.

#2: Hans Peter Luhn from IBM is recognised as the father of BI

The concept of business intelligence as we know it today, was first developed by Hans Peter Luhn, IBM computer science researcher, in 1958. Luhn drew from the definition of intelligence in Webster's Dictionary, describing it as:

“…the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal”.

#3: 1980’s — the first generation of BI was born

The 1980s marked the advent of data warehouses, systems designed for data analysis and reporting. This period also witnessed the emergence of Executive Information Systems (EIS), offering top executives a user-friendly interface to access performance data. Additionally, the widespread adoption of relational databases significantly improved data storage and retrieval capabilities.

As a result, the 1980s experienced a boom in BI applications, with tools like Crystal Reports and MicroStrategy becoming indispensable for managers seeking insightful business strategies.

#4: BI term was coined by Howard Dresner, Gartner’s analyst

In 1989, Howard Dresner, later a Gartner analyst, proposed business intelligence as an umbrella term to describe:

"…concepts and methods to improve business decision making by using fact-based support systems.”

#5: IBM and Siebel developed the first comprehensive BI systems

Actually, the first comprehensive business intelligence systems were developed by IBM and Siebel (acquired by Oracle in 2006) in the period between 1970 and 1990. Despite significant advancements in data access since the 1950s, the lack of infrastructure for data exchange and inharmonious systems still remained a big challenge.

#6: 1990’s — Business Intelligence 1.0

The BI market expanded significantly in the 1990s with the introduction of data warehousing, OLAP (Online Analytical Processing), and data mining tools. The rise of the internet also began to influence BI practices, enabling more accessible data distribution and online analytical processing.

#7: 2000’s — Business Intelligence 2.0

The concept of BI has been around for some time, yet it only became widely popular in the early 2000s. Since that time, BI software developers have focused on creating versatile and affordable BI systems that do not require expensive installations. This development democratised BI tools, making them accessible to smaller and mid-sized businesses previously unable to afford on-premise solutions.

In the early 2000s, Business Performance Management (BPM) was integrated into BI systems, emphasising the tracking and management of an organisation's performance based on key performance indicators (KPIs).

Starting in 2006, the advent of cloud storage and data management dramatically altered the BI landscape, enabling mobile and remote access. This evolution proved especially advantageous for decentralised teams and remote workers, allowing them to modify data or access it comprehensively while away from the office.

The explosion of big data ushered in significant advancements in BI, with technologies like Hadoop and NoSQL databases facilitating the processing and analysis of vast quantities of unstructured data. This period also marked the emergence of advanced analytics, predictive modelling, and the incorporation of machine learning into BI platforms, further expanding their capabilities.

#8: 2010’s - Present — Business Intelligence 3.0

Today, we are in the 3.0 stage of BI, which began in 2010. BI has become a standard tool for every medium or large enterprise across various sectors. Modern BI tools are designed for use across multiple devices and use visual analytics, enabling users to apply analytical reasoning to data through interactive visual interfaces.

The integration of Artificial Intelligence (AI) and machine learning into BI tools has further enhanced the ability to uncover insights, automate data analysis, and provide predictive analytics. Cloud-based BI solutions have also become prevalent, offering scalable, cost-effective, and accessible BI capabilities.

Lessons from BI History

The history of business Intelligence offers several valuable learnings that can inform current practices and future developments in the field.

• Organisations have learned that the effectiveness of BI tools and insights is heavily dependent on the quality of underlying data, making data management and governance crucial components of any BI strategy.
• BI has continually evolved with technological advancements, from early data warehousing solutions to modern cloud-based analytics platforms. Successful organisations have remained adaptable, embracing new technologies that enhance data processing, visualisation, and analysis capabilities.
• While early BI focused primarily on descriptive analytics (what has happened), there has been a significant shift towards predictive and prescriptive analytics (what could happen and what should be done). This progression underscores the growing importance of forward-looking insights in strategic planning and decision-making.
• With the increasing volume and sensitivity of data being processed by BI tools, data security and privacy have become paramount.
• Implementing BI solutions is not just a technological challenge but also an organisational one. Successful BI initiatives often involve significant cultural shifts towards valuing data-driven decision-making, requiring effective change management practices.

To find more learnings, let’s turn to Gartner’s Magic Quadrant for Analytics and Business Intelligence Platforms, which really matters in the industry and offers valuable insights to guide decision-making in selecting the right platform.

I haven't pinpointed the exact date when Gartner began evaluating the competitive landscape of these platforms. The earliest reference I encountered was in an article by Michael Mullany, a tech investor, board member, and advisor, dating back to 2002. The most recent Magic Quadrant is from January 2023. Therefore, reviewing the Magic Quadrants for BI platforms from 2002 to 2023 provides an excellent opportunity to understand the modern history of BI, offering insights into the evolving market positions of various BI software producers.

Key Insights

• The BI software market is changing rapidly.
  • Over the last 22 years, 58 companies have been listed in Gartner's Magic Quadrants, 27 of which were acquired by other companies, and 11 either moved to another Magic Quadrant or were dropped from it.
  • Only 5 companies that were listed in the 2002 Magic Quadrant still appear in Gartner's Magic Quadrant for 2023: Microsoft, SAS, SAP, Oracle and MicroStrategy.
• Leaders do not always lead. In 77% cases Leaders lost their market positions. Out of 13 companies that were Leaders, 10 either lost their positions or were acquired. These companies include SAP, SAS, Oracle, TIBCO Software, Hyperion, BusinessObjects, Cognos, IBM, Information Builders, and ThoughtSpot.
• Based on the previous lesson: Choosing the top performer each year is not the best strategy.
• Investing in BI platforms from Microsoft, Tableau, and Qlik is the safest option. They have been stable Leaders:
  • Microsoft has been a Leader for 20 out of 22 years and is the #1 performer for the sixth consecutive year. With the launch of Microsoft Fabric at the end of 2023, Microsoft might strengthen its position even further.
  • Qlik for 13 years.
  • Tableau for 11 years. However, skeptics question Tableau's success following its acquisition by Salesforce in 2019.
• Since 2015, SAP, Oracle and IBM decreased their ability to execute compared to other competitors. Even promising acquisitions did not help. In certain years, Oracle and IBM were even categorised as Niche Players.
• Niche Players and Visionaries are most likely to be acquired.
• Niche Players are the most likely of all quadrants to exit the Magic Quadrant.

Current State of the BI Market

Key Statistics

Today, the importance of BI tools in making decisions is clear from the wide range available. According to Datanyze, the world-wide leader in technographic data, there are 427 BI software solutions available on the market with 273 companies producing them. The market is crowded. With so many players in the game it's really key to figure out who's delivering the top-notch BI solutions.

Key Insights:

• Top 8 BI platforms generate 81% of the total BI software market.
• Mode (or Mode Analytics, acquired by ThoughtSpot in 2023) has the top spot by market share with almost 24% and is followed by Tableau (18.7%) and Power BI (13.2%).
• Notably, before acquiring Mode Analytics, a San Francisco-based business intelligence startup, ThoughtSpot held a mere 0.1% market share.
• Mode is considered a market leader but has not ever been listed in Gartner's Magic Quadrant for BI platforms. Additionally, there are only two reviews for this platform on the Gartner Peer Insights website. Thus, there are doubts about how the market share data provided by Datanyze was calculated.

Gartner’s Magic Quadrant for Analytics and BI Platforms

To gain a deeper understanding of the BI software market, merely looking at market share is not enough. A more comprehensive approach is to turn to Gartner’s Magic Quadrant for Analytics and Business Intelligence Platforms, which uses 12 critical capabilities as evaluation criteria.

As it was already mentioned above, the most recent Magic Quadrant for Analytics and BI Platforms available is from January 2023.

Key Insights:

• Microsoft, Salesforce (Tableau) and Qlik are recognised as Leaders in this Magic Quadrant.
• Microsoft, with its primary BI platform Power BI, has been positioned furthest to the right for completeness of vision and highest in the ability to execute. This means that Microsoft is the #1 BI platform vendor currently, notably for the fifth consecutive year.
• An interesting fact is that ThoughtSpot, which had less than 0.1% market share in 2022, is in the Visionaries quadrant, almost on the border with the Leaders quadrant. Gartner's main explanation for this positioning is the lack of a full D&A (Data and Analytics) stack solution and a smaller customer installed base. In this regard, it will be truly interesting to see the next Magic Quadrant, which will include the implications of the Mode Analytics acquisition.
• Among visionaries we can also find IBM and Oracle, which were at the origin of the BI software, and bunch of other well-known vendors like SAP, SAS, Sisense and Tellius.
• Google’s Looker is still one of the Challengers and is positioned furthest and highest in the quadrant.
• The only Niche Players are Zoho, Incorta and GoodData.

If you are interested in a fair comparative analysis of leading and popular BI tools, you can find a comparison of Power BI, Tableau, and Looker in a separate article.

What’s Next for BI?

The future of business intelligence is inextricably linked to the future of data. As the amount of data companies create and consume grows exponentially, the speed and ease with which you can access and rely upon that data is going to be more important than ever before.

SelectHub, which is a combination of a software selection platform and research firm, offers the following 9 key trends expected to shape BI domain in 2024:

1. Hybrid and multi-cloud setups will be in demand
2. Software partner ecosystems will boost innovation and revenue
3. Early cloud computing innovators for GenAI will spice up the competition
4. Cloud BI verticals will continue to be in demand
5. Self-service BI will drive data literacy initiatives
6. Citizen data scientists will need to get creative with GenAI
7. GenAI will drive the conversation around data security
8. Automated data storytelling will augment self-service analytics
9. Decision intelligence engineering advancements hold promise for software buyers

According to Statista, the global economy is expected to grow in the coming years, which will drive the demand for BI software. The rise of big data and the increasing need for data-driven decision-making in organisations will also drive the growth of the market. Additionally, the growing adoption of cloud-based solutions and AI-powered BI solutions will provide new opportunities for market expansion. Thus, revenue in the BI software market is expected to show an annual growth rate (CAGR 2024-2028) of 5.71%, resulting in a market volume of US$34.16 billion by 2028.

Final Thoughts

The history of business intelligence shows that it is an ever-evolving field. Today you might be a market leader, but tomorrow you could be overtaken or acquired by a tech giant. In this respect, organisations and professionals must continually update their knowledge and skills to effectively leverage the latest tools and methodologies.

REFERENCES

1. What is business intelligence?, from IBM
2. Business intelligence software, from Wikipedia
3. 150 Years of Business Intelligence: A Brief History, from CIO
4. A Brief History of Business Intelligence, from Sisense
5. 8 Lessons From 16 Years of the Business Intelligence Magic Quadrant by Michael Mullany
6. Business Intelligence Software Market Share, from Datanyze
7. Magic Quadrant for Analytics and Business Intelligence Platforms as of January 2023, from Gartner
8. Business Intelligence Trends In 2024: Future Of BI, from SelectHub
9. Business Intelligence Software - Worldwide, from Statista Market Insights