SQL Server Leads OLAP Market

SQL Server consolidated its No. 1 position in the 2002 worldwide OLAP market, where Microsoft's presence continues to drive down the value of the average sale. But even so, Redmond is not enjoying the kind of market dominance it has achieved in other markets, according to preliminary estimates for 2002 from the U.K.-based OLAP Report.

Microsoft entered the OLAP market in early 1999 with the release of SQL Server 7.0, which rocked the market for on-line analytic processing, also known as multi-dimensional databases. Because Microsoft chose to bundle OLAP services for free with the SQL Server relational database, Microsoft effectively undercut the market for OLAP products, which had previously sold for tens of thousands of dollars each.

In 2001, Microsoft first attained the No. 1 position in market share at 21.1 percent, according to the OLAP Report. In 2002, Microsoft hit 24.4 percent, giving it a slightly larger edge against No. 2 vendor Hyperion Solutions, which rose from a 19.5 percent market share in 2001 to 20 percent in 2002.

Also holding its position was No. 3 vendor Cognos, which inched up from 11.9 percent share in 2001 to 12.6 percent share in 2002. Business Objects surged from sixth place in 2001 to fourth place in 2002 on identical market share -- 6.6 percent both years. MicroStrategy carried its fifth place ranking from 2001 into 2002, but coughed up market share from 6.8 percent in 2001 down to 5.2 percent last year.

Overall the market grew 4 percent in 2002 for overall revenues of $3.5 billion. That growth is paltry in comparison to the 40 percent compound annual growth of the late 1990s, but reflects a combination of forces including wider market conditions and the downward price pressure exerted by Microsoft.

"Microsoft’s growth could actually shrink the overall market in revenue terms as its prices are so much lower than the companies whose share it is taking," wrote OLAP Report analyst Nigel Pendse.

Use of Analysis Services, the new term Microsoft introduced for OLAP Services and data mining services when it released SQL Server 2000, is growing faster than SQL Server itself, the OLAP Report found.

Pendse predicts Microsoft will increase its lead in 2003, although it could become more of a slog for Redmond in the near future.

"Microsoft has no major OLAP product releases expected till well into 2004, so it will be selling a three-year old product in 2003 and it is lucky not to be losing ground to more recently updated competitors. Microsoft also has no strong OLAP client tools, unlike the other OLAP server vendors," Pendse wrote.

The OLAP Report discussion of the 2002 preliminary market share is available at:

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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