In-Depth

Microsoft: OLAP Market King?

A British market research firm reports that the software giant had the leading—but not dominant—OLAP market share last year, despite selling an old product

• By Stephen Swoyer
• 04/07/2004

For the second year in a row, Microsoft Corp. was the OLAP market share leader, according to The OLAP Report, a UK-based market research firm that focuses on the online analytic processing (OLAP) space.

For the year, The OLAP Report ranked Microsoft first with a 26.1 percent share of the market, followed by Hyperion Solutions at 21.9 percent, Cognos at 14.2 percent, Business Objects at 7.7 percent, and MicroStrategy at 6.2 percent. Rounding out the Top 10 were SAP, Oracle, Cartesis, Applix, and MIS AG.

Microsoft grew its share by nearly 7 percent over the 24.4 percent that it garnered in 2002, when it first snatched the OLAP market crown from Hyperion. This year, the software giant’s growth also tracked with that of the industry as a whole, which in 2003 grew nearly 7 percent to $3.7 billion.

With slightly more than 4 percentage points of market share separating it from Hyperion, Microsoft cannot be said to hold a dominant market position. In fact, the OLAP Report speculates, the software giant could lose share in 2004, mostly because of the numerous delays associated with its SQL Server 2005 (“Yukon”) database release, and also because of its comparatively weak OLAP client technology. For the record, Microsoft recently disclosed that SQL Server 2005 won’t ship until sometime next year. By then, five years will have elapsed since Microsoft introduced its most significant OLAP update with SQL Server 2000.

"Microsoft has no major OLAP product releases expected till well into 2005, so it is selling a four-year-old product in 2004, and it is lucky not to be losing ground to more recently updated competitors. Microsoft still has no strong OLAP client tools, unlike the other OLAP server vendors, though the progress made by third-party client tool and application partners helps Microsoft's market share," OLAP Report analyst Nigel Pendse said in the report.

Since entering the OLAP market in late 1998 with the release of SQL Server 7.0, Microsoft has marched steadily up the OLAP Report's rankings, first with SQL Server OLAP Services (which shipped with SQL Server 7.0) and later SQL Server Analysis Services (which debuted in SQL Server 2000), both of which are bundled at no extra cost with the SQL Server database.

In this respect, Pendse says, Microsoft has had a decisive impact in the space—mostly by forcing competitors to drastically reduce their prices, and by thinning the ranks of a once-teeming OLAP marketplace. "Microsoft Analysis Services has put real pressure on other OLAP servers," Pendse said. Microsoft's arrival in 1998 hastened the exit of Acuity, Acumate, Gentia, Holos, Information Advantage, MetaCube, Mineshare, Prodea Beacon, and WhiteLight.

According to Pendse, OLAP revenues account for up to one-third of all Microsoft SQL Server revenues.

View the full OLAP Report market overview at:
www.olapreport.com/Market.htm