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December 16, 2010

Open source BI: New kids on the block

Open source business intelligence is going mainstream. Jason Stamper talks to some of the movers and shakers who are destabilising the market for the incumbents

By Jason Stamper

In a report by Gartner’s Andreas Bitterer at the start of the year, the analyst made it clear that open source business intelligence products are no longer solely the choice of price-conscious, small companies or a departmental stop-gap: open source BI has hit the mainstream.

What’s more, Bitterer said that open source BI competition is very much on the radar of the larger, incumbent suppliers, such as IBM Cognos, SAP BusinessObjects, Oracle and SAS Institute: "As you might imagine, the increasing open-source traction has not gone unnoticed by the commercial vendors," Bitterer said. "While often dismissed as being no competition, even the large established BI vendors have come up with countermeasures to address the challenges from the lower-cost competitors."

A good example of the dismissal of these open source BI providers came just last month, when the CEO and founder of SAS Institute, Dr Jim Goodnight, told CBR: "We haven’t noticed [open source BI] a lot. Most of our companies need industrial-strength software that has been tested; put through every possible scenario or failure to make sure everything works correctly. That’s what you’re getting from software companies like us – they’re well tested and it scales to very, very large amounts of data."

But the open source firms -including Actuate, Pentaho, Jaspersoft, SpagoBI and Jedox – believe they are leading a new wave in the business intelligence market. "[Goodnight] never sees it because he never leaves his own campus," Actuate’s CEO Pete Cittadini tells CBR. "SAS is big and successful, but they don’t want to give credit where it’s due because they are in denial: Goodnight, [Oracle’s] Ellison, [IBM’s] Palmisano – they’re all the same."

Actuate CEO Pete Cittadini
Actuate CEO Pete Cittadini

Actuate, which claims to have more than 4,600 customers around the world, recently changed its stock market ticker from ACTU to BIRT, in recognition of the fact that the firm is behind the open source Eclipse project, BIRT. It also announced there have now been 10 million downloads of BIRT, that there are more than a million BIRT developers around the world, and that Actuate has generated $55m in BIRT-related revenue in the past four years.

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One of the things to remember of course is that not every download of a free open source technology such as BIRT is ever put to serious use, something that Cittadini acknowledges: "Of the 10 million downloads there will be plenty who just want to kick the tyres and try it out," he says. "But the important number there is the number of developers: those one million BIRT developers, counted by a third-party independent survey, is the number worth looking at."

It’s also important to understand what is really meant when some of these companies use the term ‘open source’. To be open source software must meet the Open Source Definition but some vendors combine open source offerings, perhaps developed by the open source community, with standard commercial software: this is sometimes known as a ‘commercial open source’ model. It’s not necessarily a bad thing, either.

Open source protection
Customers are often happy to pay for commercial open source because it gives them additional legal protection, ‘high-touch’ support and maintenance, and often additional bells and whistles not available in the free open source edition (which they can try out before they make an investment).

"That’s the funny thing about these ‘open source’ BI firms," says BI specialist Information Builders’ founder and CEO Gerald Cohen. "There are two kinds of open source. There’s the pure community-driven open source, then there’s this commercial open source. Companies like Pentaho are commercial open source: if you want the enterprise version you pay separately, and it’s not that much less expensive than anyone else’s."

Cohen argues that many companies still feel concerned about using open source in their organisations: "We have to itemise every place where we have used open source for some of our clients, because they are scared somebody has used a patented technology in their open source code, and suddenly everyone gets sued."

Cohen notes that Information Builders’ RStat predictive analytics technology is based on the open source ‘R’ programming language, while it also uses the open source Lucene for search. "I’m commercialising open source too; I just don’t feel the need to call myself an open source vendor because my BI suite is much broader than theirs," says Cohen.

But Gartner’s Bitterer says that the adoption of open source business intelligence software is doubling every year, albeit from a relatively small base. Another company that says it’s capitalising on the trend is Jaspersoft, whose CEO Brian Gentile says he believes SAS’ Goodnight is underestimating the threat that open source poses: "He faces possibly SAS’ biggest threat yet from the [open source] ‘R’ programming language and tools," says Gentile. "He faces the ‘Innovator’s Dilemma’: namely that the incumbents are the last to understand the reason for new competitors. He truthfully doesn’t see it. If I was in his shoes I probably wouldn’t see it either."

Jaspersoft CEO Brian Gentile
Jaspersoft CEO Brian Gentile

Gentile says that open source BI technologies are coming from the bottom up, while tools such as those from SAS are used by experts and so come from the top down. "Competition always comes from the bottom," he says. "With open source, new-use cases are being driven by users, who can innovate without baggage from the incumbents. Look at it was users who pulled into organisations, not senior managers."

Gentile continues: "I hope [Goodnight], IBM Cognos, SAP BusinessObjects stay right where they are, ignoring companies like Jaspersoft." Jaspersoft claims it has had 12 million downloads of its software, and 175,000 of those have registered with the company. It claims its software is in use at more than 13,000 commercial companies, and around 1,000 of them are paying customers. Gentile says the firm has grown at more than 60% in each of the past three years.

Integration of open source
It’s not just in business intelligence analytics and reporting where the commercial open source model is starting to make its presence felt. Talend is a French open source data integration and quality vendor pitching itself into competition with some pretty big players, such as Tibco, Informatica, iWay Software and IBM to name a few. The firm has just announced it’s been handed $34m in VC funding from Silver Lake Sumeru – probably the largest technology VC fund in the world – some of which it has used to snap up open source enterprise service bus (ESB) company Sopera.

Speaking to CBR ahead of the announcement, Talend co-founder and CEO Bertrand Diard said: "As well as to back our growth behind the acquisition it will also give us enough fuel to look at other [acquisition] opportunities on the market, and put us in the top five open source companies."

Talend CEO Bertrand Diard
Talend CEO Bertrand Diard

Diard claimed Talend is doubling revenue every year and could choose to be profitable, but instead is investing for growth. The open source nature of the firm’s technology is key, Diard says: "You don’t have to trust our claims," he says. "You can download it free and try it for yourself."

Meanwhile, Talend’s Yves de Montcheuil, VP of marketing, described SAS CEO Jim Goodnight’s claim that open source faces less thorough testing than commercial software as "PR bullshit. One of the specific advantages of open source is that we have a wide community who help us test the software and add improvements."

But Information Builders’ Cohen also argues that some companies shy away from open source: "MySQL had 11 million downloads but did it put Oracle out of business?" he asks. "No. There will always be small, open source vendors. They’re not going away. But it’s not a big business. A lot of companies will simply not build crucial systems on open source. I have low-cost open source offerings when I need them. But it’s not going to become big business."

Cock-a-hoop for Hadoop
But another voice sticking up for the rigours of open source testing came from open source BI firm Pentaho, whose Vinay Joosery, EMEA VP, accused those dismissing open source of denying the market reality.

"BI customers are not in denial about the sheer practical benefits of open source," Joosery tells CBR. "Because the software gets exposed to large communities it matures faster and is tested outside of the labs, in the real world, every day."

Pentaho has recently been doing some work alongside Hadoop, an Apache project created by Doug Cutting, who named it after his son’s stuffed elephant. It was originally developed to support distribution for a search engine project, but is now being applied to all sorts of data-intensive applications.

Pentaho CEO Richard Daley recently told us that its Pentaho Data Integration for Hadoop and the Pentaho BI Suite for Hadoop should help enterprises overcome the steep technical learning curve, lack of skills and deployment options: "We’ve had this in beta for three months and the goal is to help make Hadoop easier for enterprise customers, more and more of which are turning to Hadoop to help with their ‘big data’ challenges," Daley said.

Pentaho CEO Richard Daley
Pentaho CEO Richard Daley

"Whether companies are using Hadoop in the cloud such as with Amazon’s Elastic MapReduce, or using Hadoop on their own premises, this saves developers from manual coding in Java and gives them easy-to-use BI and data integration out of the box," added Daley.

Daley claimed that the open source Hadoop project has really picked up speed in the past year. "We don’t need to add any hype to the Hadoop project – it has a momentum all of its own and was actually brought to our attention by community members," Daley said.

According to Actuate’s Cittadini, there are no smoke and mirrors about these new open source companies, and to what extent they are open source or commercial. "We’re creating a new hybrid model, combining an enterprise software company and all that goes along with that with a serious investment in open source," he says. But if you thought all the open source firms are the best of friends because of their similar models, you’d be wrong. "Jaspersoft, Pentaho – I think they’ll run out of steam," says Cittadini. "We might even buy them ourselves for chrissakes!"

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