Western European Data Warehousing Tools Forecast and Analysis, 2002-2006

2001 was a year of slow growth - 5.2% - for the data warehousing market with vendor growth rates ranging from triple digit positive growth to double-digit negative growth. As companies start implementing large-scale data warehouse projects again, growth will pick up especially in the warehouse access and ETL (extract, transform and load) market segments.

There is a gradual shift of revenue from warehouse generation and management to warehouse access as a result of the maturation of data warehousing. As buyers move from the initial stages of use to full deployment, spending priorities shift from capturing and storing the data toward delivering the information to a wider range of users.

IDC believes that solutions that help companies implement data warehouse projects faster will continue to be in high demand. The performance of vendors in the packaged data marts/warehouses and ETL markets underlines this. However, not all vendors can or should provide these types of products. Another option is for vendors to provide industry solutions that take the specific and unique needs across various industries into account. Vendors creating industry-specific data warehouse solutions will be able to provide greater value-add to customers and it is also a way to speed up implementation time.

Increasingly, end-users will demand data warehouse tools that combine the functionality of batch and real-time data integration processes. Vendors should aim at offering tools that will combine the capabilities of physically moving the data into central data warehouses or data marts as well as integrating this data with real-time feeds from operational databases to combine historical analysis with current trends and real-time alerts.

The Western European data warehousing tools market reached $2.0 billion in revenues in 2001, representing a growth rate of 5.2% from 2000. This is significantly lower than the growth rate of 14.0% achieved the previous year and is due to flat growth in the data warehouse generation segment and slow growth of 5% and 7% respectively in data warehouse management and data warehouse access. Like most other areas of the software industry, the data warehousing market was hit by the economic slowdown. However, there continues to be a demand for data warehousing software, but the trend toward smaller contract sizes witnessed by most vendors and the fact that decisions are being taken higher up the corporate ladder, thus increasing sales cycles - have caused the market growth to slow down.