From Dormant Gold to Economic Darling: Data Elements Are Undergoing a Glorious Transformation.

In recent years, the rapid advancement of the digital economy has been inseparable from the continuous momentum provided by the release of the value of data elements. As the fifth major production factor, the value release of data elements requires a long and complex process, from data collection, transmission, storage, and governance to analysis and visualization. Among these, data analysis and visualization can be considered the "last mile" of value release, gradually becoming indispensable "arms" in the daily business decisions of various industries, and making Business Intelligence (BI) software increasingly valued by various types of users.

Taking advantage of this trend, the Chinese BI software market is thriving and has a promising outlook. The latest IDC forecast data shows that the size of China's business intelligence and analytics software market is expected to grow to $1.07 billion by 2024, with business intelligence and analytics becoming an important investment area for enterprises in the future; it is estimated that by 2028, the market size will reach $1.79 billion, with a compound annual growth rate of 12.7% over the next five years.

At the same time, the landscape of the Chinese BI software market is also accelerating new changes. Domestic BI vendors represented by Lingyang, FineReport, Yonghong BI, and Smartbi have risen comprehensively. In competition with international giants such as Microsoft, IBM, and SAP, they have gradually formed a trend of breaking through; the arrival of the wave of generative AI technology has accelerated the intelligentization of BI, and whether domestic BI vendors can seize this opportunity to achieve overtaking has also attracted great market attention.

Why Replacement Has Become the Main Keyword in the Market

In recent years, "replacement" has become a major keyword in the Chinese BI software market.

It is undeniable that international giants such as Microsoft, IBM, and SAP have a first-mover advantage. Products such as PowerBI, Cognos, and BIEE played a key role in enlightening the market and promoting data analysis applications in earlier years.

It should also be understood that there are huge differences between domestic and foreign enterprises in data analysis and application, including usage scenarios, operating habits, function customization, and service needs, which has also led to the emergence of domestic BI software such as Quick BI, vividime, and Smartbi Insight, becoming an indispensable force in the Chinese BI market. The most representative is Alibaba Cloud Lingyang Quick BI, which has truly entered the Gartner ABI Magic Quadrant for five consecutive years and is the only domestic BI to enter the Challenger Quadrant.

The comprehensive rise of Chinese BI vendors and products is not solely due to factors such as customized development and timely service response. The deeper reasons lie in the combined effects of changing demands, technological systems, and market uncertainties.

Firstly, changes in demand in the BI market are the primary driving force behind the shift towards replacement of BI software. As we all know, the Chinese market has always been application innovation-oriented and has a large and complex range of application scenarios. With the rapid development of the digital economy and the increasing importance of data elements, various demands and changes in data consumption and data decision-making emerge endlessly. BI software needs to better adapt to local scenario demands and integrate with businesses.

For example, compared with foreign countries, the number of users and business scale of Chinese financial institutions are generally an order of magnitude larger. With the deepening of digital transformation and upgrading, the demand for data usage in daily business scenarios of financial institutions has increased significantly. Data consumption and data decision-making have gradually become basic operations for everyone from management to ordinary employees. Large-scale data analysis by some leading enterprises even requires billion-level data responses in seconds; however, some excellent foreign BI products cannot adapt to domestic needs for complex reports and flexible use, causing some foreign companies to embrace domestic BI products while deeply exploring the Chinese market to adapt to local business needs.

Secondly, the overall formation and steady growth of the domestic technological system in recent years have provided a stable foundation for the comprehensive replacement of BI software. As the saying goes, "to grow upwards, one must first take root downwards." In recent years, with the rapid growth of domestic chips, operating systems, databases, middleware, and other products, the ecological soil of the domestic technological system has become increasingly thick, providing comprehensive conditions for the replacement of upper-level BI software.

Thirdly, the sudden increase in market uncertainties is a catalyst for the replacement of BI. The turbulent changes in the external environment have greatly increased various uncertainties in the market. Key industries such as finance, electricity, and government, out of considerations for data security and business security, require data elements to flow in a trusted environment. Accelerating the embrace of domestic BI software is the general trend.

Finally, the rise of technologies such as generative AI and large models provides a significant variable for accelerated market replacement. Generative AI and large models are reshaping the underlying development, product interaction, and user experience of the entire BI industry, comprehensively promoting the intelligentization, convenience, and efficiency of BI. Chinese BI vendors need to seize the opportunities brought by generative AI technology to build their core competitiveness and achieve breakthroughs and leadership in replacement.

Challenges Remain, ABI+SaaS is the Main Path for the Future

Replacement is not the goal; surpassing is.

As the saying goes, "half the battle is won after traveling halfway." Currently, the replacement of domestically produced BI is entering a brand-new critical stage. The market is shifting its focus from security dimensions in the past to a comprehensive assessment of product, technology, and service support capabilities. In other words, domestically produced BI software needs to achieve industry-leading product capabilities in scenario adaptation and business integration.

In fact, Chinese BI vendors face considerable challenges in the process of domestic replacement, especially in terms of product performance, environment adaptation, AI technological capabilities, and user experience. There is still significant room for improvement.

Taking the degree of data interface openness as an example, as one of the core capabilities of BI software products, data interface openness measures the ability of BI software to access data sources. In the current Chinese market, there are over 200 database brands. The integration and adaptation of BI software to databases and unstructured data sources have long-term significance and value for promoting the use of domestically produced BI software.

Similarly, domestic BI software has been criticized for its ease of use and user experience, which requires domestic BI vendors to make more efforts in terms of product performance, low-code/no-code development, multi-end deployment and display, and service capabilities to better match users' experience needs. For example, some domestic BI products may experience lag or crashes when processing large-scale data.

In addition, embedded capabilities are significant for seamlessly integrating data analysis capabilities into work scenarios such as ERP, CRM, and OA. For example, DingTalk, WeChat Work, and Feishu are now the IM software used in the daily work of most enterprises. Accessing BI software in IM software to instantly push reports is greatly beneficial for "using data" in daily work scenarios.

More importantly, with the arrival of the generative AI wave, the entire BI sector is facing a complete reconfiguration, which will have a profound impact on the market landscape, product system, and even user experience. Therefore, for the next breakthrough and surpassing of domestic BI software, ABI+SaaS will be a crucial main path.

Firstly, the integration of AI technologies such as generative AI and large models with BI products will break down usage barriers, change product development and interaction methods, lower the threshold for data consumption, and completely reconstruct BI products. IDC believes that AI technologies such as large models are expected to automate the entire data analysis process, autonomously complete data integration, modeling, analysis, and insight, and provide decision-making suggestions based on business conditions.

However, the integration of AI and BI will be a long-term process that cannot be accomplished overnight, which is a great test of BI vendors' technological accumulation and investment. For example, although various large models have emerged, many general large models cannot be directly applied to vertical fields such as BI. The training and inference of large models remain a complex and costly endeavor, and it is a test of how BI vendors can integrate large models with industry knowledge and business expertise.

In fact, global BI vendors have been exploring the integration of AI and BI in the past one or two years. Taking Salesforce as an example, its Tableau is integrating Einstein GPT with existing BI functions to provide users with personalized metric insights in natural language and visual formats.

Multiple domestic BI vendors are also closely following this trend. Taking Alibaba Cloud Lingyang Quick BI as an example, it continuously trains and optimizes large models for the BI field based on the Tongyi Qianwen general large model, combined with its long-term accumulation and unique understanding of the BI business, and actively explores the integration of large models with BI products, combining them with product features such as intelligent building, intelligent question-asking, and intelligent insight.

Secondly, the SaaS model is an important trend in the digital development, and the shift towards SaaS for BI is also an important direction. SaaS not only significantly reduces the complexity of deployment and operation and maintenance management but also effectively reduces costs, promotes the standardization of BI software products, and quickly and efficiently matches business needs.

The latest IDC "China Business Intelligence and Analytics Software Market Tracker Report, 2024H1" also shows that in the first half of the year, on-premises deployment revenue accounted for 82.9%, with a year-on-year increase of 4.9%, while public cloud mode revenue accounted for 17.1%, with a year-on-year increase of 15.9%. Obviously, although the SaaS model accounts for a relatively small proportion of the Chinese market, its growth rate far exceeds that of the on-premises deployment model. In the long run, embracing SaaS has become the general trend across various industries.

Respecting the Market, the Future of Chinese BI is Promising

Currently, Chinese BI vendors are mainly divided into three categories: the first category includes traditional BI vendors such as FineReport and Yonghong BI, which primarily focus on localized deployment and delivery; the second category includes BI vendors that emphasize SaaS delivery and one-stop BI capabilities, such as Smartbi, Yixin Huachen, and Guanyuan Data; the third category includes BI vendors with an internet gene, such as Alibaba Cloud Lingyang, Tencent Cloud, and NetEase Youshu. Each type of vendor has its unique growth path, inherent strengths, technological capabilities, and key industries, contributing to a thriving market with distinct characteristics.

However, domestic replacement should not be a market speculation but rather an industrial opportunity for the rise of Chinese BI vendors. With the successive introduction of policies such as the "14th Five-Year Plan" and the "Data Element × Three-Year Action Plan," all walks of life in China are fully activating the potential of data elements, promoting the integration of digital and real economies, and embarking on a path of transformation and upgrading towards high-quality development. At this moment, how to enable more people in enterprises and organizations to make good use of data in a wider range of business scenarios has become a phased mission for all Chinese BI enterprises.

Obviously, Chinese BI vendors need to be user-centric, closely focus on users' real scenario needs in the digital and intelligent era, and continuously make efforts in product innovation and service capabilities to effectively promote the establishment of a data mindset, the cultivation of data consumption habits, and the lowering of the threshold for data use across all walks of life, truly injecting continuous momentum into the digital and intelligent transformation and upgrading of all walks of life.

Looking to the future, the rise of Chinese BI vendors is an inevitable trend, which will be a long-term competition among comprehensive capabilities such as technology, products, and services. Which vendors will write the new market landscape? Let's wait and see!