Q&A: Actuate—A View From the Top

Actuate's CEO discusses consolidation, integration, and cooperation, and his company's recent successes in the BI marketplace

Actuate CEO Pete Cittadini says that the BI consolidation of last summer has had little effect on his company’s own bread-and-butter market segment. At the same time, he says, Actuate isn’t resting easy: The company is prepping a major move into enterprise information integration (EII), which Cittadini says has major synergies with enterprise reporting. And if you have any lingering questions about Actuate’s stance with respect to Microsoft’s SQL Server Reporting Services, know that the company is ratcheting up its collaboration with J2EE application purveyors BEA and IBM.

Last summer, the BI industry underwent a round of consolidation that shook things up, especially in the reporting space. How do you think things have changed, if at all, in the reporting space, and what opportunities do you see for Actuate in a substantially altered reporting marketplace?

It was definitely an interesting and intriguing time. I guess the largest piece of consolidation was Business Objects with Crystal, and I guess that was followed by Hyperion with Brio, and there were a number of other announcements—Cognos with ReportNet, Microstrategy with Reporting Services and Microsoft with SQL Server Reporting Services.

Crystal is obviously a big Actuate competitor, but do you now find yourself competing against Business Objects as a result of that acquisition?

The Business Objects consolidation was very, very interesting. As a matter of fact, we had for many years thought about, [and] looked at, Crystal ourselves, and I’ll tell you it was a big, daunting task, as far as two enterprise reporting products coming together. So we decided not to pursue that thought process. Then we see Business Objects come in and swoop in on Crystal, and you have two companies that have drastically different cultures because of their different geographies. You have companies that have very different business models, one being enterprise, the other being direct sell.

But has the acquisition changed the competitive landscape for you, either with Crystal or Business Objects?

Today we still break out competition versus Crystal Enterprise [and not Business Objects], and for our first quarter, Crystal Enterprise was still the predominant ISV that we were competing with. However, we were competing with it less in Q1 this year than the average for 2003, and the reality behind what people do with Actuate is that we’re only really competing with ISVs 30 percent of the time. Seventy percent of the time, what we’re doing is rehosting legacy-based information flows from sort of COBOL, IBM mainframes, [and] high speed printers into internet-based enterprise reporting applications. So as far as the field, we compete with Crystal and the rest of the field about 30 percent of the time.

I’d like to switch gears and talk about the Actuate Analytics offering you announced last December. Could you talk about some of the drivers for that product offering, as well as your impressions of its success several months on?

We typically get involved with applications that go out to a minimum of 500 users, more typically it's 1,000 to 2,500, so we’re really creating reporting applications that hit the masses, well beyond the power user. There are various users well beyond those 1,000 or 2500 users who are very different and have very different ways of looking at data, and over time, we’ve been addressing certain requirements for our customer base for query capability, spreadsheet capability, and analytical capability. We have incorporated them in the order of spreadsheet capability about two years ago, and with Actuate 7, query capability initially, and then further in the Actuate 7 family the complete analytics capability, which is true multidimensional cube capabilities residing in our backend server.

How successful has it been? Well, in the earnings call at the end of the first quarter, we shared with the public that … 30 percent of the overall Q1 revenues [were] associated with the product. Actually, it’s been over the past six to nine months the fastest-growing aspect of our enterprise reporting applications platform—so very, very successful.

The Analytics offering broke new ground for Actuate. Do you see yourself expanding into any additional market segments over the next few months or years? Are there any areas that you still need to address in terms of your reporting stack?

Clearly, you’ll see continued enhancements across the platform and the stack. You’ll continue to see robustness in scalability and performance associated with the [Actuate] iServer platform. One of the parts of the iServer that we’ll be embellishing in a very, very big way is creating an EII [enterprise information integration] layer associated with the platform technology with the next release of our products. That’s always been a facet of strength for our product in allowing multiple data source access in various aspects of the application, but it’s always been very programmatically-oriented, and this layer will allow a very drag-and-drop [approach] through a semantic layer where we can get as sophisticated and more sophisticated with [fewer] calories being spent for the developer.

You think there’s a natural synergy between EII and enterprise reporting?

This will be a first and only EII [technology] associated with a business intelligence company. We realize that application server companies like BEA [with LiquidData] IBM [with information integrator] and others have been doing this, but it’s something that hasn’t caught on in business intelligence. We looked at a bunch of EII technologies and they seem to all have been failing when they’re brought to the forefront as a strategic way of redoing data access for the firm across all applications, and we believe that’s why EII really hasn’t taken off to date. But we believe that tightly coupling [EII] with business intelligence—specifically, enterprise reporting—is a nice, bite-sized way to really experience the value of EII.

What are some of the advantages you see with integration of this kind?

It allows a multitude of benefits. Most business intelligence products are exclusively going after warehouses or staging areas that were primarily put together by ETL tools, thus always looking at sort of point-in-time or historical information that they’re reporting and analyzing. With warehousing, there’s always the rub that business dynamics change so quickly that at times the warehouse doesn’t have absolutely everything that particular departments may need in it in order to efficiently access that data with a traditional suite tool.

With EII, we see the ability to extend the value of a warehouse for a particular firm. So if 80 percent of the data is there [in the warehouse] … instead of 100 percent, we need to do some analysis or information flow out to the masses that combine[s] 80 percent of the data out of the warehouse and maybe five different OLTP data sources, for example. That’s a perfect scenario for an EII layer versus having to getting that data 100 percent composed in the warehouse before it can be of value. We’re really hoping that we form a much stronger allegiance with warehouse-savvy people in extending the value of the warehouse through EII.

One final question. Microsoft formally delivered its SQL Server 2000 Reporting Services several months ago, and while it is a first generation product, it ships with a price tag—basically, the cost of SQL Server—that could prove hard to resist. Have you found Reporting Services to be a force in the market? Are you concerned that as Microsoft enhances its features and functionality, you could be competing more and more against that product?

There is a possibility for that, but the reality behind the possibility will totally be sort of oriented toward whether .NET will be embraced by the Who’s Who of large global companies that we proactively target as the environment that they really run their gemstone of operational applications with. The vast majority [of these Global 9000 companies] run their transactional systems … in J2EE environments, so it’s really hard for me to fathom that strategically all of those large J2EE infrastructures that are still in the early cycle of adding value to their firms are not going to ride the J2EE cycle to maturity and sort of jump on to the .NET infrastructure within a short period of time. If that does happen, then, absolutely, we will be competing with Microsoft, but I just think that’s a long shot.

Is that one of the reasons why you’ve really ratcheted up your integration with BEA’s WebLogic?

Well, WebLogic and [IBM’s] WebSphere. BEA owns a lot of the foundational and building blocks to the transactional applications that we’re reporting on through WebLogic, their portal server, things of that nature on the transactional application side. We believe very [a] operational system theoretically has the potential for a complementary enterprise reporting application that efficiently harvests that transactional data, and then publishes it in a way that’s much more valuable to a much more wider audience.

Since that’s what we basically do, it’s extremely, extremely important that we snap into a Weblogic or Websphere environment very, very synergistically. So it’s very important for us to really be a good J2EE citizen and work extremely well with WebLogic and WebSphere.