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Wall Street Journal entitled “Why Software is Eating the World.” 1 Andreessen makes
the argument that industries that have been traditionally involved with physical
media—from photography to music to advertising—have all become dominated, or
“eaten,” by software firms. Apple opened its iTunes Music Store in 2003, and in just
five years it had become the largest music retailer in the United States. It took less
than two more years for iTunes to become the largest music retailer in the world. In
the advertising industry, marketers can now view real-time metrics for their online ad
campaigns, enabling them to quickly iterate their messaging in ways that were never
possible using newspapers or television.
This software revolution is affecting more than the world of media. Andreessen
contends that the leading companies in almost any industry, from manufacturing to
retail to finance, will ultimately be software companies. In this model, organizations
that can become even more efficient, faster moving, and better at making strategic
decisions will ultimately have an advantage. And in the world of software, one way
to become more efficient and make the best possible decisions is to become skillful at
analyzing data.
An early, if not the earliest, mention of “business intelligence” can be found in
IBM researcher H.P. Luhn's fascinating 1958 research paper “A Business Intelligence
System,” 2 which begins with a statement that does not seem at all out of place in the
Internet age: “Information is now being generated and utilized at an ever-increasing
rate because of the accelerated pace and scope of human activities” (p. 314). Luhn goes
on to describe the design of a hypothetical computer system that could use “automated
processes” to inform business decisions. The system as described could be built using
the existing technology of the day, such as microfilm and magnetic tape.
In the present day, the business intelligence software and consulting market is mas-
sive and covers a wide variety of tools that include aspects of data processing, analy-
sis, and reporting. Huge database companies dominate the BI landscape, with highly
specialized companies filling out needs of niche markets. Visualization and reporting
products act as a window into the backend systems that are used to integrate organi-
zational data. There are even large, well-supported, open-source BI projects (such as
Pentaho and the Eclipse BIRT project).
H.P. Luhn's career spanned an era that saw a transition between computing systems
that stored instructions on punch cards to that of commercially available all-digital
computers of the 1960s. Although his proposed design incorporated the cutting edge
technology of the day, Luhn's business intelligence system design had an unfortu-
nate efficiency bottleneck. Just like today, a lot of existing business data was stored
on paper. Luhn thought that the transcription of older records would pose a problem
because in most cases it wouldn't be economically feasible to perform that job by hand.
This disparity between paper and digital media resulted in a hypothetical data silo
1. http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html
2. Luhn, H.P. 1958. “A Business Intelligence System.” IBM Journal of Research and Development
2: 314-319; available at http://ieeexplore.ieee.org/xpl/articleDetails.jsp?arnumber=5392644.
 
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