Some Business Analytics software vendors offer “integrated solutions”. What does this mean?

Here’s a life cycle model for software:

1. Innovation. Most software starts life as some kind of new tool. Tools tend to be highly flexible, have many uses and few constraints.
2. Instantiation. A set of tools given direction. An application: a managed collection of tools constrained and directed towards a specific purpose.
3. Integration. A suite of related tools and applications integrated and packaged together, and often called a platform.
4. Inclusion. The same thing as a platform in technical terms, but bundled with other software for distribution. In other words, a commodity.

The Business Analytics software market spans the whole cycle. R is a tool. RapidMiner is an application. Pentaho is a platform. OpenOffice is a commodity. These are all open source examples. Many commercial vendors cover all four categories simultaneously. The life cycle model isn’t a business model. Nor is the cycle inevitable. Not all tools make their way into applications and get integrated into platforms.

An “integrated solution” (stages 3 & 4) is a collection of tools and applications that were probably separately developed initially. Many integrated solutions are the result of acquisitions. The one thing that “integrated” reliably tells you is that the now integrated pieces were once separate. Beyond this, integration is neutral. We tend to think of integration as a positive attribute, but in fact it can be a bug or a feature. Compare the following claims:

• “Our solution is integrated.”
• “Our solution integrates with…”

These are quite different assertions. Say I’m comparing accounting packages from three vendors, none of whom are Microsoft. Vendor A claims to integrate with Excel and Vendors B and C can’t. It’s clear that integration is a positive feature here. If it is also beneficial, then it’s a differentiator in favour of Vendor A.

Alternatively, say Vendor A claims to have an integrated solution: “the Payroll module is integrated with the General Ledger”. Vendor B doesn’t: “we don’t do Payroll; we’re a best of breed General Ledger.” Vendor C is puzzled: “um, well yes, of course payroll runs post to the general ledger.” It’s not at all clear in this scenario that integration is a positive. It’s a selling point for A, but maybe that’s because they’re sensitive about the historical lack of integration. B doesn’t think it’s important enough to steer resources away from what it does best. It doesn’t occur to C to talk about it, because for C these things have just always been connected. How do I choose? I now need to compare each vendor’s worldview and I need to be an educated buyer to do so. My differentiators are going to be heterogeneous and a lot more contextual.

Related Analyst First posts:

• Measuring the Business Analytics software market
• Vendor worldviews
• Vendor worldviews evolve
• Against best practices in Business Analytics
• Analyst First 101