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US-based SAS is Germany's biggest seller of BI software (Photo: BI)

MUNICH - The German market for business intelligence software is set to grow sharply this year, as small and mid-sized companies continue to invest in products that can help make them more efficient.

According to a survey of Germany-based BI software providers, these companies boosted their sales by, on average, 11.3 pc to 1.2 billion euros in 2012. For 2013, they expect similar increases.

The survey was conducted by market researchers Luenendonk, which polled only those companies that make most of their revenues with standard BI software. The poll, therefore, didn't include big IT groups such as IBM or SAP.

In 2012, the German market for business software rose 5.1 pc, according to Luenendonk, which underscores how strongly BI products are in demand. "Investment in software solutions is boosted by a strong focus on ever more efficiency in business processes and productivity as well as on key financial ratios," said Mario Zillmann, head of professional services at Luenendonk.

Companies polled by Luenendonk expect average annual sales growth of 10.5 pc through 2018, with a slight slowdown to 9.9 pc projected for the period 2018 to 2020.

German BI software providers on average generated 40.2 pc of their sales with end-user tools in areas such as planning, analysis, finance consolidation and reporting. The second-biggest category, with 28.2 pc, was data integration and the third, with 15.8 pc, was business analytics.

Business analytics demand was strongest in distribution, risk management and marketing areas. Where software-as-a-service was requested, companies were most interested in business analytics, analysis, CRM and reporting tools.

Luenendonk found that small and medium-sized companies remain hesitant to consider cloud-based solutions, mostly because they are uncomfortable storing data offsite.

The poll cited strong demand for business performance management software, which includes tools for financial consolidation, planning and analysis. Companies polled said roughly half of their BI sales were made with these kinds of products.

According to the survey, bigger companies continue to be more likely to buy BI software than smaller ones. "In big companies, it goes without saying that you need BI," Luenendonk's Zillman said at a press briefing. "Smaller companies tend to need more specific solutions for specific areas."

As volumes of data increase, companies see a growing need to integrate separate analytical tools into a more comprehensive approach. The companies polled told Luenendonk that providing big data solutions is one of the biggest challenges in the next two-to-three years.