"The arrival of Microsoft's OLAP server will greatly accelerate the growth
of datamarts. And business users who previously couldn't even spell OLAP' will
clamor for OLAP datamarts of their own", says Michael Schiff, principal
at Current Analysis Inc., a solutions integrator in Sterling, VA.
Other pundits share Schiff's opinion. For instance, market researcher International
Data Corp. (IDC) expects Microsoft's forthcoming Plato OLAP (online analytical
processing) server to increase adoption of OLAP in the middle market. Currently
the worldwide market for multidimensional analysis (also known as OLAP) tools
is worth approximately $515 million, according to IDC. And that segment enjoyed
a 36-percent CAGR (cumulative annual growth rate) between 1996 and 1997.
Relational databases do a great job of facilitating data-entry, efficiently
storing data, and producing standardized reports. But relational databases choke
when users request ad hoc reports in which three or more data types must be
OLAP databases solve this problem by replacing the column-and-row indexing
schemes traditional used by relational databases' with multidimensional arrays
in which each field of data gets its own dimension. This feature lets OLAP databases
perform complex ad hoc queries in a fraction of the time that it takes relational
databases to do so.
Consider, for example, a sales-analysis program that collects monthly data
on products, regions, salespeople, and sales (five dimensions). Say that in
a given month one salesperson outsold all of his or her counterparts. Crunching
all the data to figure out why using traditional relational database tools is
bound to be tedious process. OLAP makes this sort of complex analysis a snap.
In this case, OLAP provides the tools to quickly drill down, find out which
products each salesperson moved that month, and compare the results with the
lists of products sold by the lesser producers. Because OLAP preindexes all
variables, the OLAP tool would perform this sort of ad hoc query in the blink
of an eye.
Roiling A Quiet Backwater
Teaming an OLAP server with a relational database provides the best of both worlds: stable, long-term data storage and fast, ad hoc retrieval. That's why all relational vendors field OLAP servers.
However, until recently OLAP was a quiet backwater in the software wars. But
that situation changed in 1996, when the OLAP market really began to take off
and when (probably not coincidentally) Microsoft elbowed into the OLAP space
by purchasing well-regarded technology from Panorama Systems Ltd.
Since then Microsoft has worked hard to integrate its Plato product into SQL Server and BackOffice. By many accounts, the technology that Microsoft acquired was excellent, and the company has done a stellar job of product integration.
In June, Microsoft shipped 50,000 copies of SQL Server 7 (and the bundled OLAP
server). If you're a solutions integrator who supports any kind of relational
or OLAP database its now time to check out Microsoft's offering to see how (not
if) it's going to have an impact on your business.
Another Paradigm Shift
If you want to be involved in the OLAP market, you'll need the following:
1. A deep understanding of the vertical market(s) in which you sell;
2. Software engineers who know how to make relational databases jump through
3. An understanding of how to structure multidimensional databases and populate
them with data from relational databases. This third requirement is a skill
that most solutions integrators don't yet possess.
"Building a good OLAP structure isn't rocket science", says David
Waugh, senior director of product marketing for Hummingbird Communications
Ltd., an OLAP vendor based in North York, Ontario. "But don't assume
that having good relational skills means you have good OLAP skills. They are
Microsoft knows that its solutions providers need new skills to help the company
conquer the OLAP marketplace. Consequently Microsoft has pledged $20 million
to subsidize the training required to sell and support the Plato/SQL Server
Analysts predict three big survivors in this space: Microsoft, offering
its Plato OLAP server; Oracle, with its Express
OLAP server; and Hyperion Solutions and IBM through an alliance,
contributing their Essbase and DB2 products, respectively. (Hyperion Software
Corp. merged with Arbor Software Corp., developer of Essbase, this past
summer to form Hyperion Solutions.)
Each of these OLAP products ties closely to a major relational database. Although
the products can be cross-connected, most SIs would do well to concentrate on
mastering all of the features of one major platform.
SIs with extensive backgrounds in data warehousing are likely to have all of
the work they can handle selling and supporting pricey solutions based on Express,
Essbase, or some other established OLAP tool. Thus, SIs that are new to the game will have ample opportunities to sell Microsoft-related
The Midmarket Magnet
"The arrival of SQL Server 7.0 provides an awesome opportunity to bring
decision support to a vast new market that previously couldn't afford OLAP solutions",
declares Richard Creeth, a principal of Creeth, Richman & Associates Inc.,
a datawarehouse consultancy in Norwalk, CT.
He notes that, to date, companies like Arbor Software have sold OLAP solutions
primarily to Fortune 1000 companies with significant decision-support needs
and budgets to match. The middle market is full of companies struggling
with static reports, Creeth says.
Now that Microsoft is making OLAP affordable, you may want to consider OLAP
enabling those database-driven applications you've already sold.
Adding additional reports to the vertical market solutions you sell and service
is nothing new, of course. But Richard Daley, director of tools marketing at
Hyperion Solutions in Sunnyvale, CA, says that OLAP tools make this job significantly
Adding sophisticated sales analysis,
budgeting, or forecasting capabilities using OLAP is an off-the-shelf sort of thing, Daley claims.
The price pressure that will likely ensue as a result of Microsoft's bundling
Plato with SQL Server 7.0 should be used as a negotiating point to achieve pricing
concessions from other OLAP vendors, advises Current Analysis's Schiff. You're
in a particularly strong position if your existing OLAP vendor is concerned
that you might choose Microsoft OLAP for some of your smaller apps, rather than
use its product across the enterprise.
Joe Devlin is a partner in Armadillo Associates Inc., a solutions integrator
headquarterd in Half Moon Bay, CA, in California's Silicon Valley. You may reach
him at Joe @armadillosoft.com