Foreign BI Firms Retreat as Domestic Rivals Rise

In recent years, data has transitioned from a dormant asset to a focal point in the economy, playing a pivotal role in driving the digital economy forwardAs the fifth factor of production, the full value of data can only be realized through a complex and extensive value chain that spans data collection, transmission, storage, governance, analysis, and visualizationThis transformation underscores the critical importance of data analysis and visualization, now regarded as the “final mile” in data valuationThey have emerged as indispensable allies in business decision-making across various sectors, leading to a growing emphasis on Business Intelligence (BI) software among diverse user groups.

China’s BI software market is flourishing as it rides this wave of change, with promising prospects aheadAccording to the latest forecasts from IDC, the market size for BI and analytics software in China is expected to reach $1.07 billion by 2024, highlighting BI and analytics as pivotal areas for future corporate investment

By 2028, this figure is projected to soar to $1.79 billion, reflecting a compound annual growth rate of 12.7% over the next five years.

Simultaneously, the landscape of China’s BI software market is rapidly evolving, marked by the rise of domestic BI vendors such as Lingyang, Fanruan, Yonghong Technology, and SimartecThese companies are gradually carving out a competitive edge against well-established international players like Microsoft, IBM, and SAPThe emergence of generative AI technologies is further accelerating the shift toward intelligent BI solutions, capturing the market's attention as stakeholders wonder if domestic providers can leverage this opportunity to surpass their international counterparts.

In this context, the term "replacement" has become synonymous with the Chinese BI software marketIt is undeniable that global giants such as Microsoft, IBM, and SAP enjoy first-mover advantages, with their products like PowerBI, Cognos, and BIEE playing crucial roles in conceptualizing the market and advancing data analytics applications.

However, it’s essential to recognize that the disparities in data analysis and application between domestic and foreign enterprises are substantial

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Significant differences exist in use cases, operational habits, customized functionalities, and service requirements, facilitating the emergence of domestic BI software like Quick BI, Vividime, and Smartbi Insight as critical players in the Chinese BI marketAmong these, Alibaba Cloud’s Lingyang Quick BI stands out, having been recognized as a challenger in the Gartner ABI Magic Quadrant for five consecutive years.

The rise of domestic BI vendors and products can’t be attributed solely to factors such as customized development or timely service responses; rather, it is the result of a confluence of changing demands, technological advancements, and market uncertainties.

Primarily, the shift in demand within the BI market is the driving force behind the movement towards replacementThe Chinese market has consistently focused on application innovation, characterized by its vast and complex application scenarios

As the digital economy flourishes and the importance of data increases, various demands and changes related to data consumption and decision-making continue to emergeConsequently, BI software must better adapt to local scene requirements and integrate seamlessly into businesses.

For instance, compared to foreign counterparts, Chinese financial institutions generally experience a higher user count and larger business scalesAs these institutions undergo deep digital transformation, their demand for data use in daily operations has surged significantlyThe expectation of quick analytics, often needing responses in seconds for billions of data points, becomes a standard requirementMany superior foreign BI products struggle to accommodate the complexities of domestic reporting and flexible usage, leading some foreign firms to embrace domestic BI solutions while navigating the Chinese market.

Additionally, the general maturation and steady growth of the domestic tech ecosystem over recent years have provided fertile ground for BI software’s full replacement

The saying holds true: “to grow upwards, one must first root downwards.” With the rapid advancement of domestic chip technology, operating systems, databases, and middleware, the emerging tech ecosystem has created a robust foundation for the elevation of BI replacements.

Increasing market uncertainties have also acted as a catalyst for BI’s evolution towards domestic alternativesExternal turbulence has significantly amplified uncertainties across various sectors, leading industries like finance, energy, and government to prioritize data security and business continuityThe necessity to operate within a trusted environment accelerates the shift towards domestic BI software as a strategic imperative.

Furthermore, the rise of generative AI and large models presents a significant opportunity for accelerating replacement in the market

These technologies are reshaping the foundations of BI development, product interaction, and user experience, propelling BI solutions toward greater intelligence, convenience, and efficiencyFor domestic BI vendors, harnessing these opportunities to build core competitiveness is essential for achieving breakthroughs in replacement and leading the charge in this new era.

However, the path to replacement is not merely a goal—it is about transcending limitationsAs BI domestic replacements enter a pivotal new phase, the focus is transitioning from safety considerations to comprehensively measuring product, technical, and service capabilitiesDomestic BI software needs to reach an industry-leading level of product strength while accommodating usage scenarios and business integration.

In truth, while navigating this landscape, domestic BI vendors face considerable challenges, especially in terms of product performance, environmental compatibility, AI capabilities, and user experience, all of which have room for significant enhancement.

Take the openness of data interfaces, for instance

This core capability of BI products gauges how well BI software can connect with data sourcesThe sheer number of database brands in the Chinese market—exceeding 200—means that effective integration and adaptation of BI software with both structured and unstructured data sources are critical to the long-term viability of domestic BI products.

Moreover, the ease of use and overall experience of domestic BI software has been a recurring point of criticism, necessitating dedicated efforts from vendors to enhance product performance, low-code/no-code development, multi-end deployment and showcasing capabilities, as well as service quality to better meet user experience expectationsFor instance, some domestic BI products face lags or crashes when processing large datasets.

Embedded capabilities also play a crucial role in seamlessly integrating data analytics into everyday scenarios, such as ERP, CRM, and OA systems

Today, platforms like DingTalk, WeChat Work, and Feishu have become prevalent in daily business operationsIntegrating BI software with these instant messaging tools for real-time report delivery can significantly enhance data utilization effectiveness in routine work environments.

Furthermore, the advent of generative AI indicates that the entire BI landscape is on the brink of substantial reformation, poised to impact market dynamics, product frameworks, and user experiences profoundlyThus, as domestic BI software evolves, a focus on ABI (Application-Based Intelligence) and SaaS (Software as a Service) models will be key pathways for future advancements.

Integrating generative AI and large models into BI products will dismantle existing usage barriers, transforming product development and user interaction, lowering the thresholds for data consumption, and fundamentally reshaping the BI landscape

IDC predicts that advancements in large models will automize the entire data analysis workflow, from integration to modeling, analysis, and insight generation, while also tailoring decision-making recommendations based on business contexts.

Nevertheless, the fusion of AI with BI will be a long-term endeavor that requires significant technical expertise and investment from BI vendorsWhile numerous large models are emerging, many generic models cannot be directly applied to vertical sectors like BI, as the training and inference of these models involve complex and costly processes, presenting challenges for BI vendors in aligning large models with industry knowledge and business insights.

In fact, global BI vendors have been actively exploring this integration over the past couple of yearsSalesforce, for example, is incorporating Einstein GPT into Tableau to offer users personalized insights conveyed through natural language and visual formats.

Domestic BI companies are similarly keeping pace with these trends

For instance, Alibaba Cloud’s Lingyang Quick BI is leveraging the Tuniversal general large model, using years of expertise in BI to continuously train and optimize a specialized model for the BI field while proactively exploring how this model can be integrated with BI functionalities like intelligent building, intelligent querying, and intelligent insights.

Moreover, the digital evolution towards SaaS models represents a significant trend in BI developmentTransitioning to SaaS not only reduces the complexity of deployment and management but also cuts down on costs, driving standardization in BI software products while enabling them to adapt rapidly and efficiently to diverse business demands.

Recent data from IDC shows that in the first half of 2024, on-premise deployments accounted for 82.9% of local revenue, marking a year-over-year increase of 4.9%, while public cloud mode revenues rose by 15.9% to 17.1%. This clearly indicates that, although the SaaS model holds a smaller market share, its growth rate significantly outpaces that of traditional on-premise deployments

In the long run, the transition to SaaS is an undeniable trend across industries.

Currently, Chinese BI vendors can be categorized into three types: those like Fanruan and Yonghong focusing on traditional, on-premise deployments; those like Smartbi and Yixinhuachen emphasizing SaaS solutions with a one-stop BI capability; and those with an Internet mindset such as Alibaba Cloud Lingyang, Tencent Cloud, and NetEase Have NumbersEach category has differing growth trajectories, foundational characteristics, technical abilities, and industry focuses, contributing to a vibrant market landscape.

However, the shift toward domestic alternatives should not be perceived as mere market speculation but rather as a vital industrial opportunity for the rise of Chinese BI vendorsWith policies such as the 14th Five-Year Plan and the “Data Element ×” three-year action plan being rolled out, numerous industries across China are unlocking the potential of data elements, driving the integration of digital and physical realms while embarking on a path of high-quality transition and upgrade