MicroStrategy: BI Consolidation? No Worries

 
 
By Darryl K. Taft  |  Posted 2007-12-18 Email Print this article Print
 
 
 
 
 
 
 

Independent BI software vendor MicroStrategy says market consolidation only makes it stronger.

The business intelligence story of 2007 was consolidation. Large players have acquired specialty houses to shore up their BI strategies. This year alone, SAP acquired Business Objects, Oracle acquired Hyperion, and IBM acquired Cognos—which all followed Microsoft's acquisition of ProClarity last year.
MicroStrategy remains an independent BI software provider, but that doesn't mean they have been written out of the plot, said Sanju Bansal, chief operating officer at MicroStrategy.
Bansal sat down recently with eWEEK senior editor Darryl K. Taft to explain why the company is in a unique position to take advantage of the changes in the BI marketplace. Q: With all the consolidation in the BI space, how is MicroStrategy set up to continue as an independent company? A: The industry consolidation leaves MicroStrategy in an enviable position as the leading independent provider of open systems BI software. There are several reasons why MicroStrategy is well positioned to continue as an independent company: One is our financial strength. MicroStrategy has a strong financial foundation. With thousands of the largest companies in the world as customers, a greater than $1 billion market capitalization, revenues of over $300 million, and perhaps the highest profit margin in the industry, MicroStrategy has the financial stability to remain independent.
Another reason is that we have a singular BI focus. MicroStrategy's only business is business intelligence. All the way from the CEO to the junior product managers, we work on business intelligence every day. Our CEO, COO, CTO, and VP of Sales started their careers as BI practitioners. We all know and understand the value of every feature in our software. We understand our customers and the challenges they face in their BI initiatives. You will not see that kind of executive ownership and knowledge in a conglomerate software company. And thirdly, there is a vibrant market for open systems BI solutions. The acquired BI providers, as part of conglomerate software companies, will operate in the more protected, closed environments of their parent companies. The contrasting dynamics of open systems versus closed systems BI solutions will create a new set of issues for customers to consider as they evaluate their BI options. We believe there will be a vibrant market for open system BI solutions, where companies mix and match best-of-breed technologies best suited for their organization. Q: Well, how will you compete with the big boys after all this consolidation? A: A new BI selection process will emerge in the industry. Companies with substantial investments in IBM, Oracle, SAP or Microsoft will do one of two things. They will purchase all of their software from their preferred conglomerate without any comparative analysis. Or they will compare their conglomerate's BI offering with that of the leading independent vendor. This will essentially exclude the formerly independent BI vendors from competing in accounts of the other conglomerate vendors. Thus, it is likely that IBM shops will not invite Business Objects, Oracle or Microsoft to compete. But they will compare Cognos with MicroStrategy or another independent vendor. In the same vein, Oracle shops will not invite Cognos, Business Objects or Microsoft to compete. But they will compare OBIEE [Oracle BI Enterprise Edition] with MicroStrategy or another independent vendor. Likewise, Microsoft SQL Server shops will not invite Cognos, Business Objects or Oracle to compete. But they will compare Performance Point BI with MicroStrategy or another independent vendor. And SAP shops will not invite Oracle, Microsoft and IBM to compete. But they will compare Business Objects with MicroStrategy or another independent vendor. The net effect of the BI consolidations will be to exclude Business Objects, Cognos and Hyperion from many sales cycles where they were once considered, and MicroStrategy will be considered more favorably as a business partner. Q: What is it you offer customers they can't get better from IBM, Oracle or SAP or one of the behemoths? A: MicroStrategy has always been known in the industry for its industrial-strength platform, engineered for the most demanding BI applications. When we first entered the BI market more than 15 years ago, we realized that customers' BI requirements would continue to grow as their data volumes and user populations increased, and as their business requirements became more sophisticated. We anticipated that customers would eventually outgrow their departmental BI applications and move to enterprisewide BI. While our competitors have struggled to accommodate the industry shift from departmental to enterprise BI, MicroStrategy's strategy has proved itself over the years. Today, our customers are some of the largest companies in the world, and they have some of the most sophisticated BI applications in the industry. This competitive differentiation has been in place for many years, and we don't expect this to change. Q: Would you consider selling? Has your company been approached for acquisition? If so, why didn't you sell? A: In response to both questions: MicroStrategy has always had a "no comment" policy on topics related to M&A. Our lawyers require us to take this stance, so we are not able to comment on these questions. We do believe that the market can be best served by a financially independent BI provider that is unencumbered by the political and technical agendas of a corporate parent. Q: Prior to the consolidation, what was MicroStrategy's position in the market vis-a-vis the likes of Cognos, business Objects, Hyperion? A: Prior to the consolidation, MicroStrategy was the third-largest open systems BI provider, following Business Objects and Cognos. We competed most directly with Business Objects and Cognos, as they were moving toward the enterprise BI space. We did not/do not compete directly with Hyperion, as they are primarily a financial applications provider. Q: Do you feel a need to differentiate or move into new areas to better compete? A: We believe there is a decade or more of innovation ahead for the BI industry. We will continue to focus on meeting our customers' expectations for functionality, performance and sophistication in their BI deployments. Two areas that are especially important to customers are enhanced query performance, especially against large data volumes; and new visualization advancements to improve the ways that users can interact with their data for greater insights and interpretation. This year, MicroStrategy introduced its Dynamic Enterprise Dashboards, which provide users with advanced visualization and animation capabilities to interact with their data in compelling new ways. In 2007, we also launched MicroStrategy Mobile, a new product that delivers BI information directly to BlackBerry smart phones. With MicroStrategy Mobile, business users can receive the same reports on their BlackBerry smart phone that they receive on their desktop, without the need for reformatting or retrofitting existing reports. Q: Would you or have you considered an open-source approach? A: MicroStrategy is not considering opening its source code to the market. Open source is still an unproven business model for enterprise software. Instead, we have over a thousand Web Services-accessible APIs that are "open" to customers and OEM partners that use them to extend, enhance or otherwise customize the MicroStrategy platform. Check out eWEEK.com's Application Development Center for the latest news, reviews and analysis in programming environments and developer tools.
 
 
 
 
Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.
 
 
 
 
 
 
 

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