The Story: With three of the largest competitors in the field taken over by software giants, you’d think that the best days of the business intelligence market were over. You’d be wrong.

[ Slideshow: 2007's top underreported tech stories ]

Far from heralding the death of BI, the loss of Business Objects, Cognos and Hyperion to SAP, IBM and Oracle may well signal “a golden age for business intelligence,” says AMR Research analyst John Hagerty.

Sure, that’s a brave statement. But the BI market has never been as narrow as many people assumed. There are significant players left, including SAS, SPSS, MicroStrategy, Actuate, and dozens of smaller, often specialized, vendors. “Go beyond the core tools of reporting and analysis and you’ll see lots of data-mining and statistical tool vendors, as well as industry-specific developers,” says IDC analyst Dan Vesset.

The acquisitions of the big guys now creates space for those other companies to flourish, says Rob Tholemeier, a former industry analyst turned private investor. The same thing happened to the database market, he notes: “There are more database companies around now than when Informix was purchased.” BI, Tholemeier says, is likely to follow the same course. “Innovation will come from the outside [companies] as the big guys expand their scale and scope,” concurs AMR’s Hagerty. Pricing, of course, is a major concern as markets consolidate. But because the supply of BI software is still ample, given the large number of independents, buyers still have significant leverage, says Vesset — though that could change further out, he adds. Moreover, it will take the platform vendors some time to integrate their acquisitions, both in terms of code and business process. And while that process plays out, prices aren’t likely to spike.

The Bottom Line: As investor Tholmeier puts it, “Clearing out the old-timers leaves a huge vacuum for the dozens of innovative players ready to strut their stuff. The business intelligence industry is dead. Long live BI.” That change presents both a challenge for IT to understand the new BI, and the opportunity to drive BI’s benefits to a greater portion of the company.

Complete list of 2007 underreported stories:
1.  Java is becoming the new Cobol
2.  Sun Microsystems is back in the game
3.  Hackers take aim at Mac OS X
4.  There are some threats you can worry less about
5.  Companies may have found a way around H-1B visa limits
6.  Open source’s new commercial strategy
7.  End-to-end Ethernet finally arrives
8.  Blade servers arrive for the masses
9.  BI is dead; long live BI
10. Balance of power shifts to software buyers