An amazing fact that I was reading, "Google wrings $235,000 of profit from the work of each of its 19,000 or so employees" according to a blog by Tom Steinert-Threlkeld at http://blogs.zdnet.com/BTL/?p=9166&tag=nl.e539. Tom talks about how Google uses the content generated by others to do this. Very interesting model.
I read Patrick's book "The Five Dysfunctions of a Team" on the flight home from Sapphire. It was a very easy read yet very deep. If you haven't read any of Patrick's books, the way he writes is to give you a little story (most of the book) which is an example of what he is trying to convey and then he has a short summary section of the key message. You can get to Patrick's website at http://www.tablegroup.com and he has a special section for Sapphire/ASUG attendees at http://www.tablegroup.com/asug. Worth going to.
I was reading a recent article by Lou Agosta in DM Review http://www.dmreview.com/issues/2007_45/10000893-1.html and he suggests that “Conventional wisdom suggests this will be a year for digestion - neither the year of the snake nor the pig, rather the year of the pig in the python.” Very good analogy. He also talks about the data warehouse appliance. I personally like the idea of the data warehouse appliance and tend to agree with Lou.
I had an opportunity to dive into the latest OLAP Report this weekend. In the latest publication, Nigel Pendse talks a lot about the consolidation in the BI space (http://www.olapreport.com/consolidations.htm) and he has an interesting chart that shows all the acquisitions in the space. His use of colours on this chart is especially interesting because you see how much consolidation there has been in recent years, as opposed to just acquisitions. In my blog on January 15th, I wrote about the consolidations in the BI space and Nigel’s chart visually highlights just how much consolidation did happen.
That is a very interesting question that I never thought to ask myself. However, when you consider this question, think of the success that Larry Ellison and Oracle have had in acquiring 39 companies since 2005. With Oracle’s stock up so much in that period of time, it seems that investors in the stock market think that Larry and Oracle are doing something right. So, what would Larry buy if he was running Microsoft?
Here is an article by Randall Stross in the New York Times that is suggests what Larry might do... http://www.nytimes.com/2008/02/24/business/24digi.html. Definitely worth a read, whether or not you think Microsoft can learn from Larry.
Now that Cognos is part of IBM, I am curious what IBM’s strategy is. Stephen Swoyer wrote an interesting article on the future of IBM and Cognos, which you can read here: http://www.tdwi.org/News/display.aspx?ID=8800. Interestingly, in the article he writes:
"What IBM is marketing, Mills said, isn't information integration snake oil, but an information-on-demand vision that puts the right information (including analytic insights) in the dashboards, reports, or pie charts of business decision makers. IBM plans to do that by yoking the Cognos BI and PM technologies to its more explicit middleware assets, offering decision makers what Mills touted as a 'complete end-to-end set of capabilities.'"
This to me is an interesting part of the three big BI acquisitions of last year in Performance Management (PM). I think Oracle bought Hyperion because it was the leader in the PM pace. Even though Hyperion was smaller than either Business Objects or Cognos, Hyperion definitely had a lead in PM. Microsoft buying ProClarity and then releasing Performance Point Server, and SAP first buying Outlooksoft and then buying Business Objects (which had previously bought Cartesis) shows clearly that everyone feels PM is important. IBM and Cognos don’t have a lot of overlapping products, so I expect their integration will happen very quickly. The positioning of the combined IBM/Cognos around PM is worth watching.
Since Simba is known for our data connectivity expertise, I get a lot of questions about how various products integrate. Right now a hot topic is the integration of SAP and Business Objects. Ingo Hilgefort of Business Objects has some good information on his blog that is worth a read: https://www.sdn.sap.com/irj/sdn/weblogs?blog=/pub/wlg/8560.
Well, it is finally official; SAP owns Business Objects. Congratulations to both companies. I recently read an article by Sam Sliman that I thought was quite good in describing SAP’s Business Objects acquisition. Here is a link: http://www.optimalsol.com/NE-Thought-SAP-True-Business-Object.htm.
When I reflect back on 2007, it was certainly a year of change in the BI industry. The three largest BI vendors – Business Objects, Cognos and Hyperion – were all acquired by some of the largest software companies in the world. Additionally, Microsoft shipped its new performance management product – PerformancePoint Server. IBM also entered the MDX space with the latest release of its Cubing Services product.
So, what will happen in 2008? 2008 will most likely see further M&A activity. However, the biggest story of 2008 in the BI space should be integration. The SAP acquisition of Business Objects and the IBM acquisition of Cognos will complete in Q1, and I am eagerly waiting to see each company’s new product roadmap.
In the OLAP space, Oracle acquired Hyperion, including its Essbase product. While Hyperion applications work with multiple data sources, they’ve tended to be better tuned for Essbase. Essbase is a major component of Hyperion’s “secret sauce”. Hyperion controls Essbase’s development direction and tuned its applications to really perform with Essbase. A tightly integrated solution that worked very well was the obvious result.
I expect to see similar tuning of Business Objects on SAP and Cognos on IBM. In the roadmaps that these companies will soon produce, other than branding, I initially expect to see Business Objects applications work better on SAP BW and Cognos applications work better on IBM DB2. This will be a big win for Business Objects customers that have SAP backend systems and Cognos customers that have IBM backend systems.
I also see Business Objects, Cognos, Hyperion and Microsoft applications continuing to work well in heterogeneous environments. Virtually every enterprise customer has multiple systems from different vendors. Any company selling applications must guarantee that those applications will work across multiple data sources. For example, if you are using Crystal Reports, you do not need to fear in the future that Crystal Reports will only work against SAP BW or R/3. Rather, Crystal Reports will continue to work against Oracle, SQL Server, DB2, etc. The advantage will be most apparent if you are a SAP customer. In this case, I expect Crystal Reports will work even better against data sources like BW because now the Crystal Reports developers will be able to talk directly to the BW developers, due to the groups working for the same company. I believe that this will be the story of 2008 – how will these vendors’ products better integrate?
I also see 2008 as being a good year for the MDX Query Language. With all the industry consolidation going on, every software vendor in the BI space will need to maintain that its products are open. As such, open standards will be key, and in the OLAP space, the MDX Query Language is the de facto standard. Oracle/Hyperion, IBM/Cognos and SAP/Business Objects will all need to continue to support this OLAP API standard, and each will need to ensure that its future MDX support is addressed in its roadmap.
I think it is evident that Microsoft Excel will continue to be the most used application in BI. Excel is the most prevalent MDX client in the market today, and it will continue to be so for the foreseeable future. Microsoft made many enhancements to Excel Pivot Tables in Excel 2007, and as Excel 2007 adoption continues to increase this year, all of the OLAP server vendors will need to keep up. Many companies, such as Hyperion, have Excel add-ins for their OLAP servers. Historically, the add-ins provided functionality that these companies felt was better than what Excel provided natively. Similarly, the add-ins also provided Excel connectivity to the companies’ proprietary OLAP interfaces. However, as the OLAP functionality within Excel matures (we saw a big jump in Excel 2007, and I expect that the next version of Excel will raise the bar even higher), the need for an add-in will drop. As such, more users will want to be able to use Excel’s native Pivot Tables functionality against products like Essbase, and as a result, this will push the OLAP server vendors to improve their MDX support.
I attended the Oracle OpenWorld Conference in San Francisco last week. It was very interesting. I had not realized just how big Oracle had gotten and this conference really opened up my eyes. The conference took up the entire Moscone Center – North, South, and West – as well as about 5 or 6 hotels.
Oracle has made many acquisitions and now has a very large number of products in the enterprise space. It was interesting to hear Oracle President Charles Phillips speak. Phillips is an ex-marine and he walked and spoke with tremendous authority. One comment he made was that today Oracle is the IPO market for enterprise software companies. Basically, Phillips was inviting enterprise software companies who felt they had an interesting value proposition and who were interested in going the IPO route to instead come show their stuff to Oracle. If the enterprise software or technology was any good, Oracle would buy the company. Phillips claimed this is good for Oracle customers because Oracle gets to see everything out there and have a good shot at buying anything that is good. This was a very interesting take to things that I had never realized before. Oracle is positioning themselves as a willing and able buyer. Strong positioning indeed.
I also attended a keynote by Andy Mendelsohn – another very interesting keynote. I did not realize that the Oracle database has a 47% market share – ahead of the next two competitors combined (IBM – 21% and Microsoft 17%). Very powerful indeed.
Oracle’s strategy seems similar to Microsoft’s. Dominate one or two businesses and use that to build/buy market share so you can dominate another business. Reminds me of Jack Welch at GE. Be the dominant player in a particular industry and earn high profits. If you are not the dominant player, the profits will be low, so exit the particular line of business and deploy the capital where you can be dominant.
One other interesting theme at OpenWorld was that Oracle is doing lots of good in the world. Oracle went out of its way to show off many of the company’s philanthropic efforts. I do applaud these.
Of course, I cannot mention Oracle OpenWorld without mentioning Larry Ellison. Mr. Ellison was the keynote on opening night and did a lot of reminiscing about the start-up days at Oracle. It definitely takes a different kind of player to be an entrepreneur and work in a start-up. It also takes a very good player to build a company from start-up to one as successful as Oracle. Congratulations to Mr. Ellison and Oracle on your 30 year anniversary.
