Knowing what your customer wants before they ask for it is a skill
all businesses want. That's why business intelligence tools are a
growing market and Microsoft, IBM and Oracle are trying to dominate
it. Murdoch MacTaggart reports
Business intelligence tools, even allowing for the specialised
nature of current products, are not new. Indeed Oracle's venerable
online analytical processing (Olap) product, Express, first
appeared in 1970. Businesses are well aware that unless they have
an accurate grasp of fundamental business data they're unlikely to
survive.
The more astute firms have long understood that competitive
advantage can be gained by analysing relationships between
disparate sets of data, by mapping product sales to particular
geographic regions or times of day, by experimenting with different
store layouts and by evaluating the impact on turnover or
profitability. The much-cited example of
placing six packs of beer close to packs of nappies could only
have been found by a rare, inspired guess or, much more
consistently for similar encouragement of impulse buying, by
intelligently analysing sales data across a number of different
dimensions.
This market has typically been dominated by expensive products
running on powerful hardware and requiring complex and expensive
consultancy to set up. As the number of dimensions to be evaluated
increases, the processing power and temporary storage needed will
typically increase exponentially. The impact on existing systems of
running complex queries against live data can often be so
considerable that the common practice has been to build data
warehouses, specialised collections of data abstracted regularly
from live operational data, cleaned of inconsistencies and put into
a standard form. In other cases, specialised tools may be used to
run queries against operational data or to interrogate localised
subsets for immediate managerial information.
The growth of Internet trading has brought with it new demands
for up-to-date analysis of data. Gigabytes of raw data, derived
from users' interactions with Web sites are available daily and
could provide valuable insights and necessary information when
processed.
What is also new is Microsoft's entry into this arena. Microsoft
is traditionally at the low end of the scale in enterprise terms
and although this is true to some degree with its entry into the
business intelligence marketplace, what is particularly interesting
is the extent of its impact in a very short time and its potential
for shaking up this marketplace. According to the authors of the
Olap Report, the new "Olap triad" will be Oracle, IBM and Microsoft
- a statement which should be considered against the current
ranking of the present generation of Olap suppliers (see
table).
MicroStrategy, currently number four in this table and showing a
steady revenue growth, has reacted by moving towards the high end
and by welcoming the impetus it sees Microsoft giving to the market
overall. Chris Ward, business information marketing manager for
Oracle says that "Microsoft is a threat, but not a serious
enterprise threat".
Comshare, another major and long-established business
information company and one whose products are highly regarded in
terms of usability and sophisticated analysis capabilities, has
reacted by embracing the Web interface approach wholeheartedly and
by continuing its strategy of maintaining interoperability with
relevant significant database managers such as Oracle8, IBM's DB2
and Microsoft SQL Server.
The SAS Institute is also moving more towards the high end by
ensuring that a range of operating platforms and databases are
supported.
Business Objects claims that the main effect of Microsoft's
entry into this area will be felt by those suppliers which are
largely reliant on revenues from Olap servers while others, such as
themselves, which offer wide connectivity and have specialist
front-end analytical and reporting tools will gain rather than
lose.
The specialist consultancy company Druid contrasts Oracle and
Microsoft as companies providing full solutions for different ends
of the market with Cognos and Business Objects as the two main
players supplying front-end tools which can work with servers from
many different suppliers.
Microsoft's impact
According to the Butler Group, business information should not
be the preserve of a favoured few power users or key
decision-makers but should be available right through a company.
Only by taking this grass-roots approach, it says, can a company
operate as intelligently as it should. Furthermore, unless firms
learn to do this, they risk being wiped out in the new, dangerous
model brought about by global trading.
The problem in the past has been both cost and difficulty. Large
software suppliers selling into the high-level enterprise space
typically do not grasp the budget and time constraints which affect
smaller businesses. Oracle, for example, says it has reduced prices
significantly in many areas in order to target small companies. Yet
one example given - its Fast Forward Budgeting package which
bundles together (Olap) Express Server, Financial Analyser,
Oracle General Ledger, Oracle Support and Oracle Training in a
total package which the company guarantees to install and
configure, so providing a risk-free contract - still costs close to
£60,000 for a 10-user version. Contrast this with the raw price for
a five-named user copy of the standard version SQL Server 7 (albeit
without general ledger, training, consultancy or support) of under
£1,000.
In the case of Olap Services, Microsoft bought the technology
but not the company. Panorama, the Israeli-based developer,
continues selling its product in specialised areas while Microsoft
has incorporated it into its SQL Server 7. Although the product
comes as part of the SQL Server 7 suite, it can be installed on its
own and need not run in conjunction with the RDBMS. Note that there
are two editions of SQL Server 7 and that it is only the enterprise
edition which includes the partitioning capability within the Olap
Services module.
Although the product was launched only at the beginning of 1999,
there appears to have been a huge take-up. Nigel Pendse of the Olap
report calculates that around half a million seats had been sold
during 1999, that makes Microsoft's market share, in terms of
numbers rather than value, greater than that of all the other Olap
suppliers combined. Licences sold for SQL Server 7 are not the same
as working installations of Microsoft's Olap Services, of course.
Nevertheless, the deployment in such a short period of time is
impressive.
Opinions vary as to the quality of the Microsoft's Olap Services
but most objective commentators suggest the product is impressive
but somewhat let down by the available clients. The main client
offered by Microsoft is Excel's PivotTables facility - but the
capabilities here fall a long way short of being able to take
advantage of what the Olap Services can offer. However, a number of
third party clients are available, most of them going well beyond
Excel's basic level of functionality in this area. These include
Nova View from Cognos, Olap@Work, ProClarity and Seagate's
Worksheet and Analyzer products.
The Olap Services themselves seem extremely fast in building
cubes and in aggregating data, while the size of database which can
be handled is impressively large. Pendse takes the view that while
Olap Services is less functional than Oracle's Express, it has
better scalability.
Although there remains a question mark about the viability of
Microsoft products in the enterprise computing marketplace the
favourable evaluations of Windows 2000, in terms of stability,
scalability and resilience, are starting to dispel these.
Olap Services in SQL Server 2000, due for release in the second
quarter of this year, will be extended and include data mining
capabilities. At the lower end, where the client functionality
provided by Excel may be adequate, the opening up of this market to
smaller firms is extremely welcome. Bigger firms may need more
functionality than Microsoft's Olap Services can currently provide,
while others will find it adequate for much of what they do and at
a significantly reduced price compared with competitive products.
If nothing else, this is likely to have a significant effect on
overall pricing.
0Olap: the major players
Attempting to estimate the world market for business information
is a hopeless task. In part this is because of the wide variations
in definition claimed by different suppliers, in part on account of
the bundling of business information tools with other products, or
the multi-functional nature of many products.
The highly regarded Olap Report does, however, regularly attempt
this in the specialised area of Olap products. Despite its long
involvement with, and experience of, this market, it still has to
estimate extensively. Nevertheless it has estimated the total
worldwide Olap market, including implementation services, at around
$1bn in 1996, $1.4bn in 1997, just over $2bn in 1998, $2.5bn in
1999 with an expectation of very close to $3bn for this year and
rising to $4bn for 2002.
It ranks the major players during 1999, together with their
market shares, as follows:
| 1 | Hyperion Solutions
(including all resellers) | 27.8% |
| 2 | Oracle | 11.2% |
| 3 | Cognos | 10.9% |
| 4 | MicroStrategy | 10.2% |
| 5 | Microsoft | 7.5% |
| 6 | Business
Objects | 5.2% |
| 7 | Comshare | 3.1% |
| 8 | Applix | 3.0% |
| 9 | IBM | 2.9% |
| 10 | Sterling
Software | 2.7% |