What’s on Tap: MicroStrategy Seriously Bullish on 2006

Like Lazarus, MicroStrategy has come back to tell us all, and looks to be a fixture in the BI marketscape of the future.

As far as MicroStrategy Inc. is concerned, the dark days of the late 1990s are as distant as the football games of other colleges—to steal a line from Ernest Hemmingway. With a new business intelligence (BI) platform release under its belt and two consecutive years of 20 percent or greater growth in revenues, MicroStrategy looks to be a fixture in the BI marketscape of the future.

One reason for that, argues chief operating officer Sanju Bansal, is that MicroStrategy remains distinctly focused on BI.

It sounds like a no-brainer, Bansal concedes, but at a time when competitors such as Cognos Inc. and Hyperion Solutions Corp. are pushing discrete planning and performance management-oriented tools as complements to their bread-and-butter BI products, it’s an important distinction.

“Certainly we’re big believers in the idea that you would use BI to monitor and ultimately manage corporate performance. We do think of BI as the feedback loop in the CPM cycle, and you need that daily feedback in order to make sure that you stay the course, and ultimately derive better corporate performance,” he says. “But the idea that there are specialized CPM products distinct from BI doesn’t make that much sense. The bulk of what these vendors do is core BI. In fact, what they’ve done is just confuse the market by introducing another acronym for what is BI through the CPM moniker.”

But what about budgeting and planning? Certainly, neither is a strictly (or even mostly) BI-based discipline, Bansal concedes. And yet both practices can benefit from BI infusions. Bansal agrees—but says budgeting and planning are more properly the territory of the Big ERP vendors.

“I do understand that in addition to the bread-and-butter BI, CPM does sometimes need to have some plans uploaded, but we think that’s the domain of the ERP vendors,” he argues. “We think companies like Oracle and SAP have been and should be ultimately the winners in the budgeting and planning part of the cycle, and the BI vendors should stick to what they do best.”

Bansal says there’s another explanation for MicroStrategy’s encouraging revenues, which grew by 32 percent in 2004 and by 24 percent in 2003: platform religion. Last year, MicroStrategy, Business Objects SA, Cognos, and Hyperion all announced integrated BI suites based on a single, unified architecture. But MicroStrategy has been powered by a unified services-oriented architecture (SOA) since it shipped its MicroStrategy 7 BI suite several years ago. In fact, when MicroStrategy introduced its then-new Report Services product in late 2003, it touted that product’s seamless integration with its eponymous BI suite as one of Report Services’ strongest selling points.

Considered as a whole, Bansal claims, 2005 amounted to a validation of that platform model. “Companies like Cognos struggled terrifically those last few quarters [of 2005], and we think that’s because there is an underlying trend away from the cube-oriented approach that has been so prevalent toward enterprise or industrial-strength BI,” he comments. “Cognos and the other [BI vendors] are moving fast to move off their dependence on departmental BI.”

There’s a reason they haven’t moved fast enough, Bansal argues. “I think our industry has really grown largely by acquisition. That’s not to say there hasn’t been organic growth, but our competitors have certainly used acquisitions to build out their BI suites,” he comments. “So it’s taken them longer to realistically be able to deliver this [unified platform]. Maybe after three or five years after they’ve been through a full generation of development, they might finally release a truly integrated architecture.”

Elsewhere, MicroStrategy last year trumpeted its tight integration with German ERP giant SAP AG’s NetWeaver platform. Bansal thinks NetWeaver—and, specifically, SAP’s Business Information Warehouse (BW)—is a good bet for the future. What’s more, he argues, MicroStrategy should benefit from user uptake of NetWeaver (i.e., BW) in 2006 and beyond.

“We achieved SAP ‘Powered by NetWeaver’ certification, and what’s interesting about that is that we have a relational OLAP engine, and we’ve taken the power of that ROLAP [which lets MicroStrategy generate dynamic SQL] and now we can generate MDX to go against SAP BW,” he explains. “We have a large minority of our customers, especially in Europe, who are moving a lot of the operational reporting they had and making it exclusively available through SAP BW. In 2006 or 2007, we’re going to see dozens of BW applications go into production, and at that point, they’re going to be looking for a good unified BI tool to work against not just their SAP data, but their non-SAP data, too.”

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About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.

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