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April 09, 2008

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Shyam Varan Nath

This is a really interesting topic. Next week at Collaborate (the largest Oracle users community event) there will be a debate on "Are Pureplay BI Vendors on way to Extinction?" Some of the views expressed in the above article kind of address that point that as the big players are are gobling up the niche BI players (such as Oracle bought Hyperion and Siebel, Cognos became a big blue - IBM and the Germans bought the French - Cognos is now a SAP company), its creating unique opportunities for the players like Informatica, Information Builder, Microstrategy and even the open source players like Pentaho. When the small and mid-size IT shops invite these niche players they know that these vendors will demonstrate their core product and will be out the door rather than the infrastructure company BI vendors who will try to sell everything they can rather than just what the customer wants.

Anthony Deighton

An interesting post/question... I would add two points.

First, I think there is a difference between traditional OLAP technology (ala Cognos, BO, Hyperion, etc.) and next generation BI tools such as QlikView. The underlying technology in OLAP is a commodity because the concepts of pre-calculating aggregates and storing them on disk are well understood. This is proven by the presence of open source vendors in that market. QlikView is in-memory *associative* analysis which takes an entirely different approach to the analytical challenge.

Second, I think software cost is largely irrelevant in this market. The real cost is the implementation after the software purchase. And, in fact, traditional BI vendors "hide" software cost in implementation. They artificially lower the cost of their software, hoping to make it up in services. This is why services represent more than 50% of their total revenue. The question customers should be asking is how many of a vendor's customers implement the software *themselves* without (or with minimal) help from the vendor.

Cindi Howson

Hi, Anthony, some interesting comments, but ones that I only partly agree with.

Indeed, the OLAP approach is a differentiator but I would say it's not well understood. People still don't understand how Cognos, Business Objects, and MicroStrategy's approaches differ. The market understands even less about how Qliktech differs, and I will admit, it didn't make sense to me until I actually tested your product.

Second, I can see where QlikView has a fast implementation time, but your specifics in services as a percent of revenue are incorrect. For most of the publicly traded vendors, the services is only about 20% of total revenues. I would say that most of the BI vendors prefer to have only a limited service offering - enough to ensure a dialog with customers and understand how the products are used - but otherwise tend to rely on partners for the bulk of needed services. As Qliktech is privately held, I have no insight as to what your portion is.

Regards,
Cindi

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