Market segment analysis

The dozens of OLAP products can be grouped, simply and logically

You can contact Nigel Pendse, the author of this section, by e-mail on NigelP@olapreport.com if you have any comments or observations. Last updated on February 11, 2005.

This section has been in The OLAP Report for some years, but is now less relevant than it once was, due to the consolidation in the market. There are now fewer significant suppliers, and the mature products have expanded to the extent that they are harder to classify neatly than they once were.

Although there are over many OLAP suppliers, they are not all direct competitors. In fact, they can be grouped into four principal categories, with relatively little overlap between them. It is convenient to show the categories in the form of a square, because this neatly encapsulates the relationships they have with each other. Where there are similarities, they are with vendors on adjacent sides of the square, and not with those on the opposite side.

Vendors can be expected to be quite well-informed — though not complimentary — about their direct competitors in the same segment (although they are sometimes alarmingly misinformed), and somewhat less knowledgeable about those in the adjacent sides of the square. They are usually relatively ignorant, and often derisive, about vendors on the opposite side of the square. More surprisingly, the same is often true of hardware suppliers, consultants and systems integrators, whose expertise is usually concentrated on a few products. This means that it can be misleading to assume that someone who clearly has expert knowledge about a couple of OLAP products will be equally well-informed about others, particularly if they are in other different segments.

This is more of a vendor than a product categorization, although in most cases it amounts to the same thing. Even when vendors choose to occupy positions on more than one side of the square (with different products or by unbundling components), their attitudes and style often anchor them to one position. The architectural differences between the products are described separately in The OLAP Report.

Briefly, the four sectors can be described as:

1. Application OLAP is the longest established sector (which existed two decades before the OLAP term was coined), and includes many vendors. Their products are sold either as complete applications, or as very functional, complete toolkits from which complex applications can be built. Nearly all application OLAP products include a multidimensional database, although a few also work as hybrid or relational OLAPs. Sometimes the bundled multidimensional engines are not especially competitive in performance terms, and there is now a tendency for vendors in this sector to use third-party multidimensional engines. The typical strengths include integration and high functionality while the weaknesses may be complexity and high cost per user. Vendors used to include Oracle, Hyperion Solutions, Comshare, Adaytum, formerly Seagate Software, Pilot Software, Gentia Software, SAS Institute, WhiteLight, Sagent, Speedware, Kenan and Information Builders — but many of these have been acquired, and some have disappeared entirely. Numerous specialist vendors build applications on OLAP servers from Hyperion, Microsoft, MicroStrategy and Applix.
   
   Because many of these vendors and their applications are aimed at particular vertical (eg, retail, manufacturing, banking) or horizontal (eg, budgeting, financial consolidation, sales analysis) markets, there is room for many vendors in this segment as most will not be competing directly with each other. There may only be room for two or three in each narrow niche, however.

2. MOLAP (Multidimensional database OLAP) has been identified since the mid 1990s, although the sector has existed since the late 1980s. It consists of products than can be bought as unbundled, high performance multidimensional or hybrid databases. These products often include multi-user data updating. In some cases, the vendors are specialists, who do nothing else, while others also sell other application components. As these are sold as best of breed solutions, they have to deliver high performance, sophisticated multidimensional calculation functionality and openness, measured in terms of the range of complementary products available from third-parties. Generally speaking, these products do not handle applications as large as those that are possible in the ROLAP products, although this is changing as these products evolve into hybrid OLAPs. There are two specialist MOLAP vendors, Hyperion (Essbase) and Applix (TM1), who provide unbundled high performance engines, but are open to their users purchasing add-on tools from partners.

   Microsoft joined this sector with its OLAP Services module in SQL Server 7.0, which is driving other OLAP technology vendors into the Application OLAP segment; Arbor acquired Hyperion Software to become Hyperion Solutions and Applix is also moving into the applications business. Vendors in this segment are competing directly with each other, and it is unlikely that more than two or three vendors can survive with this strategy in the long term. With SQL Server 2000 Analysis Services, released in September 2000, Microsoft is a formidable competitor in this segment.

3. DOLAP (Desktop OLAP) has existed since 1990, but has only become recognized in the since the mid 1990s. These are client-based OLAP products that are easy to deploy and have a low cost per seat. They normally have good database links, often to both relational as well as multidimensional servers, as well as local PC files. It is not normally necessary to build an application. They usually have very limited functionality and capacity compared to the more specialized OLAP products. Cognos (with PowerPlay) is the leader, but Business Objects, Brio Technology, Crstal Decisions and Hummingbird are also contenders. Oracle is aiming at this sector (and some of its people insist that it is already in it) with Discoverer, although it has far too little functionality for it to be a contender (Discoverer also has less Web functionality than the real desktop OLAPs). It lacks the ability to work off-line or to perform even quite trivial multidimensional calculations, both of which are prerequisites; it is also unable to access OLAP servers, even including Oracle's own Express Server. Crystal Enterprise also aims at this sector, but it too falls short of the full functionality of the mature desktop OLAPs.
   
   The Web versions of desktop OLAPs include a mid-tier server that replaces some or all of the client functionality. This blurs the distinction between desktop OLAPs and other server based OLAPs, but the differing functionality still distinguishes them.

   Vendors in this sector are direct competitors, and once the market growth slows down, a shake-out seems inevitable. Successful desktop OLAP vendors are characterized by huge numbers of alliances and reseller deals, and many of their sales are made through OEMs and VARs who bundle low cost desktop OLAP products with their applications as a way of delivering integrated multidimensional analysis capabilities. As a result, the leaders in this sector aim to have hundreds of thousands of ‘seats’, but most users probably only do very simple analyses. There is also a lot of ‘shelfware’ in the large desktop OLAP sites, because buyers are encouraged to purchase far more seats than they need.

4. ROLAP (Relational OLAP) is another sector that has existed since Metaphor in the early 1980s (so none of the current vendors can honestly claim to have invented it, but that doesn’t stop them trying), but it only became recognized since 1994. It is by far the smallest of the OLAP sectors, but has had a great deal of publicity thanks to some astute marketing. Despite confident predictions to the contrary, ROLAP products have completely failed to dominate the OLAP market, and not one ROLAP vendor has made a profit to date.
   
   Products in this sector draw all their data and metadata in a standard RDBMS, with none being stored in any external files. They are capable of dealing with very large data volumes, but are complex and expensive to implement, have a slow query performance and are incapable of performing complex financial calculations. In operation, they work more as batch report writers than interactive analysis tools (typically, responses to complex queries are measured in minutes or even hours rather than seconds), and so they do not pass our FASMI test. They are suitable for read-only reporting applications, and are most often used for sales analysis in the retail, consumer goods, telecom and financial services industries (usually for companies which have very large numbers of customers, products or both, and wish to report on and sometimes analyze sales in detail).

   Probably because the niche is so small, no ROLAP products have succeeded in almost 20 years of trying. The pioneer ROLAP, Metaphor, failed to build a sound business and was eventually acquired by IBM, which calls it IDS. Now MicroStrategy dominates what remains of this sector, having defeated Information Advantage in the marketplace. Sterling acquired the failing IA in 1999, and CA acquired Sterling in 2000, and the former IA ROLAP server has, under CA’s ownership, effectively disappeared from the market. The former Prodea was acquired by Platinum technology, which was itself acquired by CA in 1999, and the Beacon product (now renamed DecisionBase) has also disappeared from the market. Informix has also failed with its MetaCube product, which it acquired in 1995, but abandoned before the end of 1999. The loss-making WhiteLight also competes in this area, although its architecture is closer to hybrid OLAP, and it positions itself as an applications platform rather than a ROLAP server; it also has a tiny market share. MineShare and Sagent failed to make any inroads at all into the ROLAP market. Even MicroStrategy, the most vociferous promoter of the ROLAP concept, has moved to more of a hybrid OLAP architecture with its long-delayed and much improved 7.0 version, which finally shipped in June 2000. Despite being the most successful ROLAP vendor by far, MicroStrategy has also made by far the largest losses ever in the business intelligence industry.
   
   Similarly, customers of hybrid products that allow both ROLAP and MOLAP modes, like Microsoft Analysis Services, Oracle Express and Crystal Holos (now discontinued), almost always choose the MOLAP mode.

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