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September 14, 1998

Microsoft And OLAP: Sudden Impact

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Clearly MS/SSOS and the new Microsoft standards (see story, "Decision Support Cycle Unique") have to concern the MOLAP and HOLAP vendors. Though MS/SSOS is still in beta testing, I believe its performance will be at least competitive to incumbent MOLAP/HOLAP tools, even though it may lack some of their functional nuances. MS/SSOS's aggregation-tuning wizard and partitioning capabilities certainly are innovative.

Because the multidimensional OLAP design is constantly shifting and changing, tuning an OLAP database can be part art, part science. The Microsoft wizard puts a bit more science into the art. And as Netscape has learned, ever-improving Microsoft freeware does win market share.

There are some natural limits to how much business Microsoft will steal from MOLAP/HOLAP vendors. Developed applications can be vital OLAP components--and MS/SSOS has very few of those. The mechanism for connecting MS/SSOS to data sources is OLE/DB for OLAP, and it requires custom programming. Other vendors' tools provide non-programmer power users with simpler scripting languages. In addition, MS/SSOS runs only within Windows NT, and that operating system's scalability, reliability, and performance usually don't match Unix and other mainframe systems. There's no built-in Web interface; third-party tools will have to supply one. MS/SSOS will not be supported directly by Microsoft with a set of consultants who can provide vital support and downstream services. Also, beta 3 of SQL Server 7.0 doesn't have cell writeback and cell security critical to budgeting and financial modeling and what-if analysis; the shipping product may or may not have it.

Clearly, MOLAP/HOLAP vendors will have fewer niches than their data warehouse-building counterparts. And given that the OLAP client and desktop vendors have had the OLE/DB for OLAP interface to work with for nearly a year, expect some amazing offerings in the new OLAP front ends to MS/SSOS. Already there's the free Seagate Workshop. It's important to note these new front ends will also work with the SAS MDDB engine, Whitelight Server, and any other OLAP servers that become OLE/DB for OLAP providers as well as consumers.

While end users may be happy with the pricing windfalls and new interoperability, OLAP vendors may have to find a new way to find profit. However, this is an idiosyncratic market with a lot of specialized niches where the possibility of creating added value is possible.

Important things are happening in P&DSS. Data mining and knowledge discovery are not only feeding better information and insights into planning and marketing strategy. They're also acting as support services for industry-specific operational processes. Likewise, very large data warehousing systems are becoming critical targeted-marketing planning systems for many national retailers. With Web implementations or E-mail--and pager-based systems such as MicroStrategy's Broadcaster--organizations can trigger highly specific reports and alerts to hundreds of key people based on weekly or even daily updates.

With key need-to-know triggers and alerts filtering throughout an organization, P&DSS systems are starting to map back closely to operational systems by providing informed feedback that makes for high payback opportunities. Likewise in OLAP modeling, more vendors are going beyond raw software with turnkey applications such as Gentia's Balanced Scorecard or Hyperion's OnTrack.

Microsoft's SQL Server 7's free P&DSS will change the industry. The server's release also raises the antitrust question: Is it fair to be able to bundle and price at zero in markets where a vendor has little or no presence (OLAP) while raising prices in markets in which it has a monopoly (desktop operating systems)?

The free services are also a test of whether the classic PC marketing model--which is to set prices low in large, growing markets while making the software easy to use and offering some free, competitive capabilities--can win significant P&DSS share in a market where IS shops are used to round-the-clock availability, scalability, and maintainability--plus close consulting support. Finally, will software vendors with distinctive specialties in data warehouse building or niche OLAP competencies be able to thrive and prosper when faced with free features from a major vendor?

Jacques Surveyer is a consultant based in Toronto. He can be reached at jbsurv@inforamp.net.

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