The data warehousing industry continues to grow in terms of spending, product availability and projects. Our research efforts indicate that up to 90 percent of multi-national companies will have data warehouses or are planning to build one by 1999. The size of the market is expected to grow rapidly, doubling in spending roughly once every two years until the year 2000.

The number of data warehouse vendors continues to increase, as does the number of available warehousing products. Such a trend, however, may abate in the face of market consolidation, which began in the mid-1990s and continues to this day.

Small companies with compatible products can be seen merging (e.g., the November 1997 merger of Apertus Technologies and Carleton Corporation) to create larger, more competitive warehouse players. Larger, established corporations have set objectives of becoming end-to-end warehouse solutions providers and are acquiring technologies from niche players to fulfill these goals (e.g., the February 1998 acquisition of Intellidex Systems by Sybase and the March 1998 acquisition of Logic Works by Platinum Technologies).

Partnerships and alliances between vendors continue to be popular. The increasing maturity of the warehousing software market is inevitably turning warehouse software into off-the-shelf packages that can be pieced together. Already companies are positioning groups of products (their own or a combination of products from multiple vendors) as integrated warehousing solutions.

The industries to first adopt data warehousing technologies have been the telecommunications, banking, and retail vertical markets. The impetus for their early adoption of warehousing technologies has been attributed largely to government deregulation, and increased competition between industry players—conditions that heightened the need for integrated information.

Over the past few years, however, other industries have begun investing strongly in data warehousing technologies. These include, but are not limited to, companies in financial services, healthcare, insurance, manufacturing, petrochemical, pharmaceutical, transportation and distribution, as well as utilities.

Despite the increasing adoption of warehousing technologies by other industries, however, our research indicates that the telecommunications and banking industries continue to lead in warehouse-related spending, with as much as 15 percent of their technology budgets allocated to warehouse-related purchases and projects.

Data mining tools will continue to mature, and more organizations will adopt this type of warehousing technology. Learning from data mining applications will become more widely available in the trade press and other commercial publications, thereby increasing the chances of data mining success of late adopters.

Data mining initiatives are typically driven by marketing and sales departments and are understandably more popular in large companies with very large databases. Since these tools work best with detailed data at the transaction grain, the popularity of data mining tools will naturally coincide with a boom in very large (terabyte-size) data warehouses. Data mining projects will also underscore further the importance of data quality in warehouse implementations.

There is currently no metadata repository that is a clear industry leader for warehouse implementations. Each product vendor has defined its own set of metadata repository standards as required by its respective products or product suite.

Efforts have long been underway to define an industry-wide set of metadata interchange standards, and a Metadata Interchange Specification is available from the Meta Data Coalition, which has at least 30 vendor companies as members.

Data warehousing technologies continue to be affected by the increased popularity of intranets and intranet-based solutions. As a result, more and more data access and retrieval tools are becoming web enabled, while more organizations are requiring web-enabled features as a warehousing requirement for their data access and retrieval tools.

Some organizations have started using the Internet as a cost-effective mechanism for providing remote users with access to warehouse data. Understandably, organizations are concerned about the security requirements of such a setup. The warehouse no doubt contains the most integrated, and cleanest data in the entire enterprise. Such highly critical and sensitive data may fall into the wrong hands if the appropriate security measures are not implemented.

The Windows NT operating system will continue to gain popularity as a data mart operating system. The operating system is frequently bundled with hardware features that are candidates for base-level or low-end warehousing platforms.

Companies that develop and market major operational application packages will soon be offering warehousing modules as part of their suite of applications. These application packages include SAP, Baan, and PeopleSoft. Companies that offer these application packages are in a position to capitalize on the popularity of data warehousing by creating warehousing modules that make use of data in their applications.

These companies are familiar with the data structures of their respective applications and they can therefore offer configurable warehouse back-ends to extract, transform, quality assure, and load operational data into a separate decisional data structure designed to meet the basic decisional reporting requirements of their customers.

Understandably, each enterprise will want the ability to customize these basic warehousing modules to meet their specific requirements; customization is definitely possible with the right people using the right development tools.

Mergers and acquisitions will continue in the data warehouse market, driven by large corporations acquiring niche specialties, and small companies merging to create a larger warehouse player.

Examples include:

In all respects, the data warehousing industry shows all signs of continued growth at an impressive rate. Enterprises can expect more mature products in almost all software segments, especially with the availability of second- or third-generation products. Improvements in price/performance ratios will continue in the hardware market.

Some vendor consolidation can be expected, although new companies and products will continue to appear. More partnerships and alliances between different vendors can also be expected.