BI Scorecard Blog

IBM to Acquire SPSS ... and Announces New Analytics System

Yesterday IBM announced its intent to acquire the advanced analytics vendor SPSS for $1.2 billion.

The acquisition fills what had been a void in IBM’s business intelligence capabilities and is a further expansion of its Information on Demand portfolio, with $10 billion in acquisitions over the past several years.

Predictive analytics has been a hot topic for years but one in which there seems to be little consensus on how to bring it from the back room to the front lines.  It’s clear that building good predictive models requires a high degree of expertise and is not something that will become main stream any time soon.  However, incorporating the results of those models into every day decisions that even the most novice of information users can consume and act upon has become the holy grail. So what does that mean – store everything in the database? Execute at run time and surface in a report?

Not surprisingly, SAS has made the most inroads here by both pushing analytics into the database for faster execution and based on larger data volumes, but also, surfacing the results in standard reports in its BI platform.  Of leading BI vendors, Microsoft and MicroStrategy also have good solutions that surface results in either Excel 2007 or a MicroStrategy report, respectively.  (see the BI Scorecard Summary report for more information.)

Interestingly, SAP BusinessObjects began shipping an OEMd version of SPSS last spring. The SAP BusinessObjects Predictive Workbench allows the BusinessObjects universe to act as a data source to Clementine modelers. It will be interesting to see if this agreement remains in place following the acquisition’s close. The challenge of course is that beyond SAS and SPSS, the predictive analytics space is predominantly smaller players.  

Amidst this announcement, IBM says it was purely coincidental timing that many press and analysts were at their R&D offices attending a briefing on their new “Smart Analytics System” (due out in September) and “Smart Analytics Optimizer” (due out in Q4). The Smart Analytics System is more than an appliance, including the hardware, software, and services optimized for a particular BI deployment, or as IBM calls it “analytic workload”, whether predictive or not. IBM guarantees a 50% lower cost of ownership versus the current approach of buying and deploying components a la carte. A lower cost of ownership and faster deployment time is of course appealing. However, it seemed odd to me that the first versions of the systems only include Cognos as an option, not a standard component. Same applies to ETL capabilities. In this regard, while the vision is enticing, I can’t help but remain skeptical customers will continue to have the degree of flexibility they currently have. 

Or has the market gotten to the point that time to value and lower cost of ownership trump flexibility and the desire to mix and match components?

Regards,

Cindi Howson

 

 

 

 

 

Free MicroStrategy 9 ... Can You Believe It?

When MicroStrategy first floated the idea of a free version of their software several months ago, my gut reaction was not positive. I kept looking for the catch. I also was imagining the inevitable competitive FUD (fear, uncertainty, doubt) that ensues in a cut throat market place. “The product is so weak, so hard, so niche, they have to give it away.”

So far, I can’t find the catch. Given the product capabilities, migration path, and support, it seems like a deal too good to be true.

Other vendors have touted their products as “free” and have experienced mixed degrees of success. Oracle has sometimes included Discoverer and Reports (now referred to as the standard edition) for free with the RDBMS; the newest OBI Enterprise Edition, however, is not free and is notably more robust.  Microsoft BI is often considered  “free”, assuming you’ve bought SQL Server and SharePoint.  I would counter, then, that those products are low-priced but not free.  Clearly, Microsoft has had a successful seeding strategy that explains the rapid adoption of Analysis Services (for OLAP) and Reporting Services (for production reporting).  Open source BI is also “free”, but lacks support and maintenance, unless you pay.  It’s also not yet clear that they compare in capabilities to commercial software.  (Look for some upcoming evaluations this year where we hope to answer that question.)

The free version of MicroStrategy, called Reporting Suite, is for up to 100 users and includes online support and training. Some of the more attractive products like the dashboards and the new in-memory option are not included for all users in this starter bundle.  But the appealing aspect to this deal is that it provides customers with an easy entrée into BI, without that entrée being a total throw away. If customers later want to add dashboards or multi-source, for example, they don’t have to start over or migrate to a new product as is often the case with many departmental BI tools.

BI licensing is only one part of BI’s total cost of ownership (TCO). While it is usually the smallest piece in TCO, it is an out- of- pocket expense that companies would like to minimize in the economic downturn.  MicroStrategy’s Reporting Suite saves that expense.

A valid concern with this deal is that MicroStrategy will make up for the “free” by overcharging later, when customers are hooked and want to add options. Indeed, MicroStrategy has alienated customers in the past with its aggressive, sometimes inflexible, pricing tactics. But over the last 2-3 years, the company seems to have recognized those tactics back fired and has modified its pricing accordingly. The BI landscape is also significantly different from that of 3 years ago;  the vendor knows it has to be more creative about even getting invited to a BI selection when usually one of the big 4 vendors already has a relationship.

This latest move seems like an attractive option for both departments and smaller businesses with limited BI budgets. For companies that know their BI deployment will evolve into something bigger, I recommend continuing to follow a BI selection process (see this  report for a methodology). As part of that process, compare the full range of capabilities and the total cost for your requirements, regardless if you start out with a free version.

So with this deal, it seems good as well as true.  But of course, let me know if you find whatever catch I’m overlooking!

Regards,

Cindi Howson, BI Scorecard

The Answer to Pervasive BI: The Fed?

“Mainstream BI”, “pervasive BI” and “BI for for the masses”  have been the rallying cry for BI vendors for nearly a decade now.  Some thought Microsoft could do it with an Excel interface. Others think Google will be part of the answer.  I am looking to the Fed.

No, it’s not that I am on the bandwagon for the stimulus being the answer to all the world’s woes. However, when President Obama first mentioned a website (recovery.gov) as a way of ensuring full disclosure for stimulus spending, I got as excited as anyone can amid this economic crisis.

My vision for recovery.gov is that it will showcase the best of BI. It will be engaging, simple, and insightful. I’m hoping for a Google-like interface where I can start with a search request such as “education spending in NJ”.  An appealing chart (rather than a dense page of numbers) will show me how the money has been spent. It will give me the necessary context, relative to other states, and to prior years. And of course I can drill down to my individual county.

My envisioned recovery.gov will not only provide the monitoring capabilities, but also facilitate insight to action by giving me contact details for whom to appeal to when I think the spending looks unfair, wasteful, or just plain wrong.

Am I visioning too much? Maybe. But I hope the best BI tool vendors and consultancies are aggressively vying for this opportunity. Many eyes will be on recovery.gov, and I can well imagine the marketing bang a “Powered by BI Vendor X” could bring if this site and application are well designed. Of course, if it’s boring, static, and a flop, then the Fed will be in the same situation as many organizations struggling with BI adoption.

Back to the present: I head to Las Vegas this weekend for TDWI’s Winter Conference. The “BI Bake Off” course I facilitate includes Microsoft, SAP BusinessObjects, and MicroStrategy in this round. I expect to get glimpses of some of their latest versions as well as chance to pose the tough questions, “how much of recent downsizing is in the BI business? ... What does Microsoft's change of strategy on performance management mean to BI and to other vendors? ...” The upside to this down economy is that my airfare is an all time low of only $250, 1/3 of the normal price. With travel costs so low, I hope you are taking the opportunity to fulfill your New Year’s resolutions of “investing in you!”

Regards,

Cindi Howson

MicroStrategy's Breakthroughs in Release 9

Just over 1000 MicroStrategy customers convened in Las Vegas lastweek for its annual user conference. Given how travel budgets have been slashed in recent months, I was surprised to see that attendance is only slightly lower than last year’s. No doubt high attendance was driven in part by interest in the company’s introduction of MicroStrategy 9.

The general session kicked off with a Tina Turner look alike singing “we’re simply the best.” VP of Products Mark Larow described MicroStrategy 9 as the biggest release since version 7, perhaps the biggest release ever, packing in over 8000 enhancements. The most noteworthy are multi source ROLAP and in-memory.

Multi-source ROLAP allows MicroStrategy customers to access data in any relational database – whether SQL Server, Teradata, DB2 – transparently. In the past, a project (the business meta data layer) was constrained to a single data source. So this is big news for existing customers. From a competitive viewpoint, other vendors have had this capability for awhile, and it’s one reason why MicroStrategy would lose deals to them. Even though some competitors have had this capability, only time (as in my further testing and production customer references) will tell if MicroStrategy’s approach is better, as they claim. The key differences are in ease of implementation and performance because joins are pushed down to the data source versus being performed on the BI midtier as competitors do.

The in-memory ROLAP is a breakthrough and clear differentiator. While there are some in-memory solutions on the market, they lack the seamless navigation for users and the enterprise architecture MicroStrategy has. With MicroStrategy 9, a user can be drilling in-memory and then seamlessly drill into the relational details; an administrator does not have to manually define mappings that can be broken. An intuitive Cube Advisor also makes recommendations for what data and queries should be a cube to offload database queries, all based on analyzing usage statistics. Despite my enthusiasm for this new capability, some customers were confused about its value and the difference with the product’s current caching approach.

CEO Mike Saylor described MicroStrategy 9, saying ““I’m convinced this is the best BI product created by anyone in the marketplace …ever.” For my fact-based opinion, you’d have to read the BIScorecard product summary here. But I would counter that the best product doesn’t always win. For a recent example, take a look at Blue Ray vs HD DVD ... or betamax vs VHS if you were around then!

 In that regard, while MicroStrategy is both profitable and total revenues are growing, license revenues are not. This is in contrast to competitors’ growth. This shows that what also matters is the degree to which competitors are BI incumbents, have account control through other products (ERP or database), or have greater mindshare. Whether MicroStrategy “gets” and addresses these issues will make for an interesting 2009!

Sincerely,

Cindi Howson, Founder, BIScorecard

TDWI In Las Vegas - Bigger Than Ever

This week’s TDWI conference turned out to be one of the biggest, with over 1000 attendees and another 200 executives at the BI summit.

A highlight from the Executive Summit was hearing Michael Masciandaro, BI Director at Rohm and Haas, provide practical tips on where to start with BI. He presented all the lofty goals often discussed at this conference – great data quality, robust architecture – and advocated not to start there. Instead, start with something “embarrassingly small” with a subject area or application that has no competition.

The BI 2.0 discussion gave credibility to the importance of “eye candy” in making BI appealing and improving adoption among skeptical users.  The use of Flash in MicroStrategy Enterprise Dashboards and Crystal Reports 2008 seemed to dazzle IT and business executives alike.  Mark Madsen’s demonstration of mashups was nothing short of cool. He contrasted statically displayed crime data – the normal display for most police departments – with such data more effectively integrated with Google Maps. The town spent big bucks on the less usable display whereas the mashup was put together by a passionate programmer in his spare time.

At the “BI Bake Off” course, I was once again surprised at how many attendees are doing a first time BI suite selection, roughly 40% of the 100 who took this course. Companies trying to rationalize the number of tools also take this course. Despite the reality of companies having multiple tools from multiple vendors, I was still staggered when a banking person revealed his institution had 23 different products (not multiple modules from 1 vendor, but products!).

A final question from an attendee to the vendor panel (Business Objects, Microsoft, Oracle) took me by surprise. “Given Cindi just told us where your products are weak and gave some red and yellow scores for each of you, what do you think your weak points really are?” There was a pregnant pause. I laughed, suggesting he would not get such an honest answer in a public forum. To my surprise, each vendor did respond, for the most part somewhat candidly (offline, I normally hear those red scores are ALL wrong J!). But of course, a recurring theme to the answers was “everything is fixed in the next release!”

So I leave Las Vegas , with my now smoke-scented clothes (hey, if Paris can ban smoking, why not Las Vegas ?!?!), thinking BI is not at all a mature market. Innovation continues to come from vendors big and small, and if conference attendance is any indication, the BI market remains strong.

Regards,

Cindi

MicroStrategy Matures - Notes from the Conference

Were the holidays only two week’s ago? They seem a distant memory with so many BI headlines this week alone. SAP and Business Objects announced a number of joint bundles, Cognos launched 8.3, and MicroStrategy kicked off its annual user conference in Miami. The frenetic pace of BI continues in 2008!

Over 1200 partners, customers, and prospects gathered in Miami to hear about new products, best practices, and MicroStrategy’s thoughts on industry consolidation. At times in its 18 year history, the vendor has come across as somewhat arrogant, but this year, CEO Michael Saylor seemed more tempered yet passionate as he declared “We want to be your strategic enterprise provider. … We have to earn the right to be your partner. We are in listening mode.” Saylor suggested that MicroStrategy has grown out of its tumultuous teen years to enter young adulthood.

For customers here, they say MicroStrategy has already earned their loyalty and see industry consolidation almost as a non issue. Multiple customers attested to MicroStrategy’s excellent account management, noting that certain competitive BI suppliers – to whom they also pay hefty maintenance fees – don’t seem to care if they succeed with BI and are only interested when it’s time to sell more software. Given the breadth, complexity, and value of some of the MicroStrategy-based BI applications, several customers said it would be easier to swap out the database than MicroStrategy.

Let’s keep things in perspective, though. MicroStrategy is notably aggressive in its pricing and licensing policies. While the vendor’s stance seems to have softened in the last year, those alienated customers were clearly not at the conference.

Another interesting take away from the conference in aftermath of recent consolidation was MicroStrategy’s dance partners. CTOs from Informatica (the market leader in ETL) and Teradata (a market leading database for data warehousing), and MicroStrategy united to discuss pervasive BI. These BI/datawarehouse independents all have a commonality in that they:

• focus exclusively on only a portion of the BI market
• don’t compete with one another
• greatly complement each other

Such alliances are more straightforward than those with partners (such as Microsoft, SAP, and Oracle) who also have competitive products. Even as independents, together these three vendors make for a powerful combination in the BI industry.

While there was a fair bit of speculation about the change in tone and what it all means, the most excitement came from a peek at MicroStrategy’s next platform release. Due out later this year, it includes things such as handling of multiple data sources and an overhauled OLAP services to a shared, in-memory cache. Heterogeneous data access has been a product weakness, one in which competitors currently do better. Improvements to the OLAP capabilities, on the other hand, may put them ahead in this area. For more details on the vendor’s and product’s strengths and weaknesses, see the BIScorecard® MicroStrategy Overview report.

Check my blog next week for more commentary on this week’s other BI news …

Regards,

Cindi