One of the highlights of the study – the 15.7 percent growth in the OLAP market was the highest rate in the past five years.
For those of us who are SAP-centric, it’s important to keep in mind that large companies on average have implemented 3.4 data warehouse packages on average (source: CIO), and that SAP BW has a relatively small share of the overall data warehouse market. As reported by Pendse, …"IBM, Oracle and SAP, which dominate in other markets, are all relatively weak in the OLAP market…. (but) many SAP sites feel obliged to install and use Business Information Warehouse (BW), though there are very few successful deployments and large volumes of shelfware. But, despite this, we estimate that SAP BW deployments grew significantly in 2004."
The OLAP Report: Market Share Analysis
by Nigel Pendse
Summary: The study reveals that the online analytical processing (OLAP) market has recorded its best growth since in 2000, to become a market worth $4.3 billion.
The OLAP Report recently published details of the 2004 OLAP Market Shares Report (www.olapreport.com). The study reveals that the online analytical processing (OLAP) market has recorded its best growth since the downturn in 2000, to become a market worth $4.3 billion. Despite the maturity of the market, the OLAP market continued to expand faster than most other enterprise software sectors.
Nigel Pendse, leading OLAP and business intelligence analyst and author of the study comments, "Despite the consolidation in 2003, the market still remains relatively fragmented, with three of the top five vendors losing net market share in 2004, and the other two making modest gains. As the market matures, growth normally slows due to a degree of market saturation, but the 15.7 percent growth rate of 2004 demonstrates that sales of OLAP products are accelerating."
Pendse predicts that 2005 will also show strong growth: "Microsoft will continue to make further gains in 2005, boosted primarily by partner product enhancements, as the Yukon release of SQL Server won’t be released until the end of the year which will have little impact on its 2005 market share. MicroStrategy will continue to do well, propelled by its newly released version 8 software and SAP’s OLAP share will increase based on the bundling of Business Information Warehouse as part of mySAP. Further market consolidation is inevitable and vendors will need to reassess their market strategy in light of the Microsoft threat.
2004 was the best year since 2000 for the OLAP industry, and all the vendors grew, though of course to varying extents. This caused changes in the market shares, but as there was no major consolidation in the year, the changes were less dramatic than in some previous years.
The long-forecast consolidation in the BI industry took off in 2003, with Business Objects, Cognos and Hyperion all widening their product ranges with significant acquisitions. However, neither Brio Software nor Crystal Decisions had significant OLAP business, so these acquisitions, though significant for the BI market as a whole, had relatively small impacts on OLAP market shares. Despite this consolidation, the market still remains relatively fragmented compared to, say the ERP or database markets, with three of the top five vendors losing net market share in 2004, and the other two making modest gains.
The OLAP market continued to grow faster than most other enterprise software sectors, though still at a lower rate than in the 1990s. There were signs of growing demand towards the end of 2003, plus the weak dollar magnified the organic growth through increasing the impact of sales made in stronger currencies, particularly in Europe. These trends continued into 2004, which showed the best growth rate since 2000. The early signs are that the market has remained buoyant in 2005.
However, despite the growth in OLAP sales and usage, it is becoming ever more difficult to estimate the exact size of the whole market and the individual market shares. The larger generalist vendors – Microsoft, Oracle, SAP, Business Objects – cannot even measure their OLAP business themselves, because their OLAP capabilities are often delivered as part of larger, bundled products and account for a minority of their revenues. For example, Microsoft Analysis Services and the OLAP capabilities of SAP BW are not sold separately, but are included as part of product suites. Other vendors, such as Hyperion, do track but no longer publish details of their individual product sales, which makes it harder to isolate their OLAP business. It is therefore necessary to estimate the extent to which customers deploy the OLAP products and this is necessarily approximate. Our aim is to provide a good indication of trends, but not to claim precision to the last decimal place.
Although the OLAP market is consolidating, it is still much more open than most enterprise software markets. Microsoft has now clearly overtaken Hyperion Solutions to become the largest OLAP vendor, but neither could be called "dominant." Although Microsoft’s lead is likely to increase further in 2005, it will still not have anything like the dominance it enjoys in some other markets. In fact, it may only have the same OLAP revenue market share in 2005 as Hyperion Solutions enjoyed immediately after its ill-fated merger in 1998. Microsoft has no major OLAP product releases expected until late 2005, so it is selling a five-year-old product in 2005 and 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.
Similarly, IBM, Oracle and SAP, which dominate in other markets, are all relatively weak in the OLAP market, and Oracle in particular has had several years of decline. Oracle may start to stage a recovery in 2005 as it completes its new generation product line, but it has now lost too much ground to ever recover the leading position it held in the mid 1990s. Many SAP sites feel obliged to install and use Business Information Warehouse (BW), though there are very few successful deployments and large volumes of shelfware. But, despite this, we estimate that SAP
BW deployments grew significantly in 2004.
Other Points of Interest
The 15.7 percent growth in the OLAP market was by far the best since 2000.
Some of the reported "growth" was caused by the weak dollar.
Microsoft continued to increase its lead.
MicroStrategy was the fastest growing vendor.
There was no significant further consolidation in 2004.