Research firm IDC predicted that global spending on business intelligence (BI) would hit $12.5 billion last year. Gartner foresees a five-year compound annual growth of 7.3 percent through 2009. And a survey Gartner conducted of more than 1300 CIOs from around the world found that in 2005 delivering more effective business intelligence would be one of the priorities on the agenda.

Furthermore, financial firms tend to be the heaviest users of BI technology, according to Dave Mittereder, CEO of Citigate Hudson, a Microsoft Gold partner that builds solutions on top of Microsoft Analysis Services and Microsoft SQL Server 2000.

“Part of it is they do a lot of transaction-based processing, consequently they have many different systems for handling processes. There’s an immense volume of data, and connecting all archival data stores and extracting data from systems that are sometimes decades old, can seem unwieldy,” said Mittereder.

Part of the rise in interest in the technology can be attributed to business goals: “In the simplest terms customers are looking to leverage existing data assets to derive positive return on investment – in the form of cost reduction from improvements in their business processes, customer service improvements or potentially new revenue sources that could be uncovered through predictive analysis,” Mittereder said.

In addition, he noted, high profile companies like Wal-Mart and FedEx – whose businesses are almost defined by the efficiencies they’ve implemented with BI – have shown the rest of the corporate world what BI can do.

But Mittereder believes BI’s rise can also be attributed to technology. Microsoft has put downward price-pressure on what was traditionally an expensive area, he said. And BI is changing into something that is available to users at many levels rather than just to senior executives, a shift that also changed the economics of the technology. Citigate Hudson calls this new approach Pervasive Business Intelligence.

Citigate Hudson, like many vendors in the space, sees BI as part of a larger process. Cognos, another Microsoft partner, described BI as the third step to a performance management continuum that begins with planning and consolidation to help clients understand where to take their business and is followed by scorecarding during the execution phase. BI then allows users to continually analyze data for trends, opportunities or areas where efficiency could be improved.

“Where other technology tells you the what, BI tells you the why,” a Cognos spokesperson said.

Cognos’s flagship BI tool is PowerPlay – OLAP software for analyzing large volumes of data. Its ReportNet product allows users to see one version of data across departments through a Web services-based application. Other products provide graphical displays of data, ETL (extraction, transformation and load) software and an event notification system.

Citigate Hudson provides business analysis services; data analysis, for locating and identifying gaps in data; Microsoft-based ETL development; reporting services; analysis services and MDX; SQL Query development; and performance tuning, training and documentation.

Meanwhile, Citigate Hudson chief of new technology, Andrew Brust, a Microsoft Regional Director for New York and New Jersey has pointed out that Microsoft’s SQL Server 2005 holds a lot of promise for the future of BI. Its pro-active caching allows cubes to be designed using ROLAP (relational OLAP) – allowing for real-time analysis, and cached using MOLAP (multidimensional OLAP) for better performance. Also, the data mining platform will be enhanced and designing and maintaining both OLAP cubes and data mining models will become easier.