Pyramid sees opportunity in staying an independent BI company

While the business intelligence software industry has been caught up in a wave of mergers and acquisitions over the last year, one established vendor, Pyramid Analytics, has every intention of remaining an independent BI company.

Pyramid was founded in 2009 and is based in Amsterdam with U.S. offices in Seattle and Boise. Despite being dwarfed in size by rivals like Microsoft Power BI and the newly-combined entities that have emerged after Salesforce's now completed acquisition of Tableau and Google's pending purchase of Looker, it says it is not seeking a buyer.

Instead, the vendor sees an opportunity to grow amid the M&A wave that has transformed what was an established landscape.

Mergers and acquisitions, according to Pyramid CEO and co-founder Omri Kohl, leave collateral damage.

Most seem like good ideas when they first happen, but over the long term some don't necessarily work out as planned, Kohl noted. The ones that ultimately aren't executed to plan can leave disgruntled users in their aftermath, the once-happy customers of the company that got acquired but lost something important in the absorption into the larger entity.

Kohl views the acquisitions of Looker and Tableau and sees opportunity. He has no more insight into whether the acquired companies' users will be happy with how things work out than any other outside observer, but he knows many users are waiting to see what happens before they form a view, and that some perhaps will wind up unhappy.

And that's one way an independent BI company such as Pyramid can grow.

"When we talk to our customers we see concerns about mergers and acquisitions, and we can take advantage of customers' concerns," he said. "Sometimes mergers and acquisitions are very successful, but the majority affect the product and the culture of the acquired company."

But Pyramid will need to do more than merely swoop in to gobble up disgruntled customers in the aftermath of an acquisition if it's going to compete for business as an independent BI company against the massive enterprises taking shape as a result of mergers and acquisitions.

A smaller player has a place. The challenge is to carve out a niche, or to differentiate themselves. If they're just another broad player, it's going to be hard for them to compete and it's game over. But if they're able to differentiate themselves … then it makes sense.

"I absolutely think a smaller player has a place," said Tim Crawford, CIO Strategic Adviser at AVOA, an advisory firm based in Rolling Hills Estates, Calif. "The challenge is to carve out a niche, or to differentiate themselves. If they're just another broad player, it's going to be hard for them to compete and it's game over. But if they're able to differentiate themselves … then it makes sense."

Crawford noted that by designing their products to serve the needs of specific industries -- such as financial services companies, government agencies and healthcare organizations -- an independent BI company like Pyramid can stand apart from a Microsoft Power BI, for example, a broad-based tool designed for use by many but specific to none.

"There are a lot of general-purpose products that do a lot of things well but not great," he said, "but niche products serve that one niche really well."

And as an independent BI company, Pyramid does have a particular demographic it targets.

"Pyramid is focused on the enterprise market – the Fortune 100, 500, 1,000," said Kohl, who also noted that to compete as an independent BI company "you need a ton of capital, and differentiation is the key."

Customers include the U.S. Department of Veterans Affairs, Hallmark, Hewlett-Packard, and Dell EMC, according to Pyramid.

Another way Pyramid aims to separate its product from those produced by the larger BI vendors is the technology itself.

Many vendors add on to existing products to move them forward -- to take them from an on-premises desktop tool to the cloud, in one example, but also simply to add features it may be lacking in a more common example. But Kohl maintained that Pyramid's product is a complete BI tool as soon as you turn it on.

"At the end of the day the successful companies will be the ones that cover the entire universe of data consumption needs and provide everything from a single application," Kohl said.

As evidence of the respect Pyramid has garnered, it was first named in Gartner's proprietary Magic Quadrant for Business Intelligence and Analytics in 2014 and has appeared every year since. It's always been ranked as a niche player and never a leader or visionary, but for a smaller independent BI company, that's still significant in the Gartner universe.

In addition, Pyramid was named an overall leader in customer experience and vendor credibility in Dresner Advisory Services' 2019 Wisdom of Crowds Business Intelligence Market Study.

But currently, with estimated revenues of $40 million, Pyramid is in a group with a host of other independent BI companies. To grow, it will have to stand out.

Pyramid has room to become bigger, like competitor MicroStrategy, but Pyramid also competes with many similarly sized vendors such as Sisense, Yellowfin and Domo, said Rick Sherman, founder and managing partner of Athena IT Solutions, based in Maynard, Mass. "Pyramid has more of a platform than some of the other firms, but can that get them noticed?"

"How do they break out? That's the multi-billion-dollar question," he said.

Pyramid is going against the trend.

While some startup BI vendors form with the sole aim of eventually being acquired, and others opt for mergers to grow and gain stability, Pyramid says it is staunchly opting to remain an independent BI company.

It sees opportunity on the consolidating landscape.

But just as only time will reveal whether Tableau remains the popular product it's been now that it's part of Salesforce and whether Looker will be left to innovate once it's under Google's umbrella, time will ultimately tell whether Pyramid can thrive as an independent BI company in a land of giants.