What is a Business Intelligence Vendor?

D. Nelson

A business intelligence vendor is a company that specializes in selling business intelligence management software. There are two types of vendors. Those in the first category are known as "pure-play" vendors, while those in the second are called "megavendors." The two types of vendors differ both in size and in their paths toward entering the market.

Thanks to business intelligence vendors, today's business decisions are often based on data visualization.
Thanks to business intelligence vendors, today's business decisions are often based on data visualization.

When a business intelligence vendor is considered to be pure-play, this vendor operates independently. In other words, the vendor of the business intelligence software sells only its own product. Many pure-play vendors are eventually approached by larger vendors for consolidation, which may result in increased earnings, improved marketing, and higher rates of distribution.

The megavendor is a kind of business intelligence vendor that is made up of a number of smaller vendors. Formed through acquisitions, these megavendors are often the result of consolidation. As opposed to acquiring full products, however, these vendors often choose from various offerings and functions. In other words, instead of acquiring a complete product from an independent vendor, the megavendor will instead choose only those functions or offerings that are most effective or marketable. These functions can then be integrated into their other products.

Aside from selling business intelligence software, a business intelligence vendor is also responsible for optimizing the trends that emerge within the business intelligence industry. For example, vendors have focused on products that allow business intelligence analysts real time intelligence. This is a way to shorten the time between business events and the production of data for analyzing those events. Vendors have also created a trend in which there is increased visualization of data, which allows for more sophisticated analysis.

There has been much debate in the business intelligence community regarding which kind of vendor, the pure-play or the megavendor, creates the best products. Many specialists in the field believe that there are many strengths held by the megavendors. One strength is that a megavendor will have a much stabler and stronger financial base. This allows for increased effectiveness and more sophisticated features in their software products.

Others believe that the best kind of business intelligence vendor is the pure-play vendor, which is an independent and therefore smaller operation. While pure-play vendors are limited financially, many analysts believe that this kind of vendor pays more attention to its products, thereby creating more effective and precise software, even if the graphics and visualization features are not as sophisticated. Proponents of pure-play vendors believe that megavendors, which have numerous acquisitions, are less likely to pay close attention to making sure that each specific product reaches its best potential.

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