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Report: Microsoft Leads OLAP Market

Microsoft consolidated its leadership position in the OLAP marketplace in 2003, but the software giant does not hold a dominant position and may slip slightly in 2004 due to continuing delays of "Yukon" and Microsoft's weak OLAP client technology, according to the OLAP Report.

The OLAP Report is a U.K.-based market analysis firm focused on the online analytic processing, or multi-dimensional database, market that Microsoft entered in late 1998 with the release of SQL Server 7.0. Since then Microsoft has marched steadily up the OLAP Report's rankings with SQL Server OLAP Services and later SQL Server Analysis Services, both products that Microsoft bundles at no extra cost with its flagship relational database management system. Prior to Microsoft's entry, OLAP software sold for several tens of thousands of dollars or more.

The OLAP Report released its annual vendor market share rankings this month. It ranked Microsoft No. 1 with a share of 26.1 percent, followed by Hyperion Solutions at 21.9 percent, Cognos at 14.2 percent, Business Objects at 7.7 percent and MicroStrategy at 6.2 percent. Rounding out the Top 10 in descending order of market share were SAP, Oracle, Cartesis, Applix and MIS AG.

Microsoft first gained the market share lead in 2002, with 24.4 percent share. The entire OLAP industry grew about 7 percent in 2003 to $3.7 billion.

"Microsoft has no major OLAP product releases expected till well into 2005, so it is selling a four-year-old product in 2004, and it is lucky not to be losing ground to more recently updated competitors. Microsoft still has no strong OLAP client tools, unlike the other OLAP server vendors, though the progress made by third-party client tool and application partners helps Microsoft's market share," OLAP Report analyst Nigel Pendse said in the report.

Microsoft disclosed recently that SQL Server 2005, previously known by the code-name "Yukon," would not ship until sometime in 2005. (See related article). SQL Server 2005 will include Microsoft's first update to its OLAP server technology since September 2000.

While the OLAP Report's free public report does not list the revenues by vendor, a 26.1 percent share of a $3.7 billion market is about $966 million. The Microsoft figure includes some Microsoft OLAP client software, which could include estimates of Excel seats used for Pivot Tables and Microsoft's Data Analyzer client, and third-party OLAP client software designed for Analysis Services. The figure also includes consulting and training revenues related to Analysis Services.

Microsoft has not achieved the market dominance that Hyperion enjoyed in 1998 when it acquired Arbor Software in 1998. Hyperion-Arbor combined for about 30 percent of market share at the time.

Nonetheless, Microsoft could be said to be more of a force in the market now than Hyperion was at its peak, given the software giant's impact on average sales prices and sales volume. According to the OLAP Report, "Microsoft Analysis Services has put real pressure on other OLAP servers," Pendse said. Microsoft's arrival in 1998 hastened the exit of Acuity, Acumate, Gentia, Holos, Information Advantage, MetaCube, Mineshare, Prodea Beacon and WhiteLight.

The report contains one other interesting estimate -- that OLAP revenues account for up to one-third of all Microsoft SQL Server revenues. While the figure speaks to the popularity of the technology for multi-dimensional databases, it also would mean Microsoft's share of the relational database market may be only two-thirds as large as the company's SQL Server revenues would suggest.

View the full OLAP Report market overview at:
www.olapreport.com/Market.htm

About the Author

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

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