VentanaMonitor™

Summary

At its 2004 user conference, MicroStrategy revealed its latest market position, product releases and future product plans. As for market position, MicroStrategy declared it is now and will be a business intelligence technology vendor. It also highlighted its MicroStrategy Office and Report Services products, detailing current capabilities and future directions.

Ventana Research views MicroStrategy’s BI-centric position as consistent with many ongoing and near-future IT initiatives. Its product roadmap builds upon this position, strengthening an already strong, integrated, and scalable platform. However, there is growing demand for performance management-related solutions and MicroStrategy’s BI focus may slow its participation in these new initiatives driven by line of business.

Assessment

The overall theme for MicroStrategy’s user conference was Business Intelligence for the Enterprise. At the event, 800 customers and partners listened to MicroStrategy executives, marketers, partners, and showcase customers share their perspectives on the company’s recent performance and its expectations for 2004. Company strategy and future product plans were among the topics presented. MicroStrategy continues to focus its products and services on the business intelligence market, unlike the other BI market leaders (Business Objects, Cognos, and Hyperion) that have aligned their corporate positioning with Performance Management and Business Intelligence. MicroStrategy CEO Michael Saylor and his key executives were careful to assure customers that, despite its growing financial success, MicroStrategy would stick to its business intelligence focus and not divert into other business ventures as in the pasts.

The enterprise support theme was revisited as executives extolled the ability of MicroStrategy’s products to handle large amounts of data and users. Executives cited survey results showing MicroStrategy-based BI deployments accessing dramatically larger amounts of data than competitors do. Also in support of its enterprise support theme, MicroStrategy continued to describe its products’ capabilities within the context of five BI usage styles (enterprise reporting, cube analysis, ad-hoc query & analysis, statistics & data mining, and report delivery & alerting). It announced several enterprise-sized sales including the United States Postal Service for $4M. The USPS project expects to deploy to tens of thousands of users.

Ventana Research believes that MicroStrategy’s enterprise focus addresses two high-priority BI deployment needs found throughout the business world. These needs are; (1) BI cost reduction through consolidation and standardization of BI platforms within the enterprise, and (2) organizational empowerment through broad information deployment to organizational line-of-business workers.

MicroStrategy Office and Report Services led the product discussions at the conference. MicroStrategy Office enables integration of the MicroStrategy suite with Microsoft Office. Leveraging Microsoft’s adoption of XML as a file description and communication protocol standard, MicroStrategy Office enables Microsoft Word, PowerPoint, and Excel users to directly access information from MicroStrategy without leaving their Microsoft applications. This provides various benefits including:

Ventana Research views MicroStrategy’s integration of business intelligence technology with Microsoft Office as an innovative step towards easing user access to enterprise information. Of course, Excel integration is already available from many other BI vendors, but integration with Word and PowerPoint is new and unique. For organizations using these Office products to prepare periodic management reports, MicroStrategy’s Office can reduce preparation cost and time.

Report Services, MicroStrategy’s production reporting product launched in November 2003, was touted as a success. MicroStrategy announced that 46 customers had purchased Report Services in 46 days. Of note, 67% of to-date purchases were to augment existing projects. This is in alignment with Ventana Research’s expectations for a large part of near-term purchases of Report Services to come from MicroStrategy-loyal customers with pre-existing, but unsatisfied, reporting requirements. MicroStrategy stated that 18% of sales were to replace existing report products from other vendors. While this number is small, Report Services still lacks features commonly found in other products such as HTML-formatted reports. As MicroStrategy adds this remaining functionality, organizations dissatisfied with existing report products from other vendors will likely consider Report Services as a replacement.

A large part of the executive presentations at the conference concerned MicroStrategy plans and expectations for 2004, especially product plans. Delivery of version 7.5.1 of the MicroStrategy product suite will occur in the first quarter of 2004 and will include various feature upgrades. Notably, Report Services will be able to present data within various gauge types. Gauge thresholds will be data driven. These features clearly show that MicroStrategy believes dashboards to be an important segment of its business. At the same time, MicroStrategy has stated that dashboards should be viewed as a report variation and not a separate product. This differs from products and positions taken by Business Objects, Cognos, Hyperion, and other vendors that have delivered separate dashboard-specific products. Ventana Research views the approach taken by MicroStrategy (as well as Actuate and Information Builders) as conservative. While likely in keeping with how many organizations currently view their dashboard platform requirements, opportunities to assist organizations seeking more sophisticated dashboard functionality, such as collaboration, may be missed.

MicroStrategy presented future product releases beyond version 7.5.1. One project, code-named Pollux, will focus on making the MicroStrategy suite available on UNIX. Support for 64-bit versions of UNIX will also be included in this release. MicroStrategy stated that it felt the 64-bit version would provide significant performance improvement. Ventana Research agrees that 64-bit operating system support will significantly benefit all BI products. Dramatically enlarged memory capacity will significantly diminish the need for disk-based caching of reports and data, and will reduce the query latency where disk accesses were previously required.

Complementing Pollux is another project code-named Pegasus. Pegasus will provide incremental functionality in several key areas. Of these, expanded data access is a key new feature area. Code-named XDA, for Extended Data Access, this feature area will enable direct access via Microsoft’s multidimensional query language, MDX, to SAP BW (via BAPI) and to Microsoft Analysis Services. It will also support developer-defined custom SQL, stored procedure invocation and integration of data from multiple sources. Ventana Research views each of these new data access capabilities as significant for MicroStrategy customers. While other BI vendors already offer some or all of these capabilities, MicroStrategy will gain differentiation by providing this functionality as part of its tightly integrated product suite.

Other future features revealed but not tied to a particular project were integrated data mining support in the Intelligence Server and HTML/DHTML visualization of Report Services reports. With the planned data mining integration, organizations will be able to define metrics based upon dependent variables calculated by various data mining processes. Integration with external data-mining products such as SAS via PMML will also be possible. For Report Services, the planned HTML and DHTML visualization capabilities will complete the planned set of alternative visualization modes. Reports may be delivered in HTML-only format with limited interaction or in DHTML format with extended interaction.

The Pollux and Pegasus projects round out the MicroStrategy suite, extending its feature set to respond to customer requests and competitor differentiators.

Market Impact

MicroStrategy is executing well in the market. Revenue growth is industry-leading. Its product suite is more tightly integrated than other leading BI suites. Company viability issues have receded into the background. If its recent past predicts its future, MicroStrategy is poised to continue its course of growth for the next year, if not further. The most significant challenge they face is capturing new customers from other leading BI vendors. While MicroStrategy’s technology is robust, motivating organizations to throw out existing investments in competitors may prove difficult. In the longer term, Business Objects and Cognos will become tougher competitors with their larger salesforces and with completed BI platform integrations.

Recommendation

MicroStrategy provides a well-integrated, scalable, broad set of business intelligence products. Organizations evaluating enterprise business intelligence platforms should consider MicroStrategy’s BI suite. MicroStrategy Office should be considered where PowerPoint, Excel or Word documents are the final format for enterprise information. MicroStrategy Report Services has robust support from the rest of the platform and will be a solid reporting product when remaining features such as HTML reports are added.

MicroStrategy’s emphasis on business intelligence limits its ability to completely fulfill performance management initiative requirements. Organizations seeking to implement performance management applications should consider MicroStrategy because much of its suite can be applied to performance management initiatives. Organizations seeking performance management-specific products should also examine other vendors.