One of the questions we ask in the BI Survey is which criteria people use to choose BI products. Buyers in The BI Survey don't seem to find Web support very important. Specifically relatively few mention it as a reason for selecting the product they elected. In fact, less than one in ten do.

Of course that does not mean that Web based BI tools are no longer used. It just means that as a product differentiator, a Web platform really is not of any great interest to buyers.

This is interesting because Web architecture is a priority areas for business intelligence vendor R&D, and marketing departments often emphasize the Web capabilities of new releases.

If you are interested in business intelligence or follow the doings of SAP, you probably already know that the former BOBJ CEO John Schwarz has left the company. The temptation is to delve into the details of all the post-takeover events at SAP and try to puzzle out the proximate cause of this move. Then you could do a little Kremlinology, trying to guess what is going on in the minds of various execs.

But I prefer to stick to a few general observations.

• When business intelligence companies get taken over, the senior management almost always leaves after a few years.
• There has been some discussion that Schwarz was shooting for the CEO job, but that hardly seems likely to me. Remember SAP had about ten times the revenues of BOBJ. Also, as SAP has learned the hard way, selling business intelligence software is a very different business than selling ERP.
• The main thing that keeps an executive of the acquired company on board is a clause in the contract. As soon as the clause expires, the executive jumps ship.

That's about it, really.

OK, like Oscar Wilde, I can resist anything but temptation. Look at the press release. Schwarz says "I strongly believe that SAP BusinessObjects will play a vital role in SAP's future success" and that he is "confident about the future direction of the company". It's hardly a ringing endorsement of SAP's ERP business, is it?

The last partner presentation I saw at the the Microstrategy was given by Microsoft's Donald Farmer on the subject of PowerPivot. The presentation didn't seem terribly relevant to Microstrategy, but it was a solid gee-whiz run-through of PowerPivot's features accompanied by a distracting post-modern slide deck featuring grainy black-and-white photos and classic ads. Donald also mentioned one intriguing tidbit that surprisingly no one really seemed to pick up on.

Afterwards I had dinner with Donald and Neil Raden in an unobjectionable casino restaurant. Neil is a devoted dad and regaled us the entire evening with amusing with anecdotes about his family. And as usual on such occasions we spent a lot of time gossiping and reminiscing. It was good fun.

The tidbit was that Excel 2010 will be able to run on the same machine as Excel 2007. Am I the only one who missed this? I've been discussing Microsoft's new Office version and how it fits Microsoft's BI strategy with just about anyone who will listen for months and I don't think I've heard anyone talk about this.

Microsoft's BI strategy has always been platform oriented. By this I mean that Microsoft is really interested in pushing its platform and the BI tools have always been an appendix to this goal. When it comes to Excel, Microsoft's main challenge is to get users to upgrade and BI features are offered as a gambit to drive upgrades.

The problem here is that Microsoft's argument doesn't quite add up. Customers are supposed to use Microsoft's BI tools because they have them anyway, but they are supposed to upgrade to the newest Office version because then they get the BI tools. I have heard this called synergy, but it isn't – it is circular logic.

Most large companies will reluctant to take advantage of the BI features built into Office 2010 if it requires upgrading the Excel version. Microsoft often competes on price in the BI space, but there are simply too few BI users as a percentage of total Office users to justify a costly Office upgrade to get free BI features.

But all this assumes the company will only run one version of Excel. But if I understood Donald Farmer correctly, you can now run two versions of Excel on the same machine, meaning Excel 2010 can be positioned as a ”normal” BI tool that runs alongside Excel 2007. If Microsoft follows this strategy in the field it could bring a lot of clarity into its BI strategy.

The word market means different things to different people. Adam Smith's idea was that markets are about competition, and competition auomatically keeps tabs on vendors and consumers. So actually markets are about competition.

However, if you are in the marketing business, market is just another word for opportunity, and opportunities tend to arise in places where there is little or no competition.

Check out famed internet marketeer Seth Godin's blog entry on Groucho Marx.

Seth states "It's extremely difficult to repair the market." What is he actually saying?

He's saying get out of situations where you have to compete directly. So for him, a market is a place where there is no competition, and when competition comes, it's time to get out.

That is the point to vendor lock-in. When you lock in your customer, you lock out the competition. And that is why software vendors love it so much. It demarketizes the customer relationship.

Switching costs are the costs incurred from changing from one brand to another. Tangible switching costs are things like laying a new telephone line. Intangible costs are things like the cost of switching to a new telephone number.

Vendor lock-in is when a customer prefers a different product than the one he uses, but not enough to pay the switching costs. Many vendors of high tech products work to increase their own lock-in and decrease the lock-in of their competitors. In some cases, for example computer hardware, switching costs tend to decrease with time.

Brand specific training for users of computer software is a lock-in that tends to increase with time. Users do not like changing from software they are familiar with, and the longer they use the software, and more proficient they become, the less willing they are to change. With enterprise software, the cost and risk of switching from one product to another is a powerful force maintaining the status quo.

Lock-in is the key issue in software marketing. The usual marketing ideas that apply to selling high margin consumer goods like fresh fish simply do not apply. In fact the normal rules our supply and demand are so skewed in the IT market that they are almost impossible to recognize.

Competing commodity software packages immediately become freeware. The reason is that the high initial cost of creating software combined with the low marginal costs per customer encourages vendors to increase market share by price cutting. If there is no brake, the market ends up spiralling down to freeware. If a new standard is introduced into the market, and it succeeds in becoming a real standard, your package may become a commodity and you may find yourself having to give it away.

But by locking customers into a solution, software vendors can reap sizeable profits even if their products are more or less the same as the competition. The reason is that the switching cost, and not the license fees for the software itself –- which tend to be a small part of the total cost of ownership -– is what is keeping the customer paying.

Interesting story behind Jedox hiring the remaining Alea developers from Prague. As far as I know there are three left, but once there were thirty. The MIS hotheadedly fired most of them after the disastrous Alea 4.0 project back in 2001 (or maybe 2002, I have forgotten).

Alea was a clone of TM1 developed by MIS GmbH from scratch in Prague back in the mid 90s. After squandering its IPO money, MIS ended up as part of Infor. Comshare was there too, and the two product lines started to compete internally and merge. In my opinion MIS had better technology than Comshare, but I am not a neutral observer.

One upshot of all this is Alea was renamed Infor OLAP and development was moved to Ann Arbor. My guess is that this is one reason why Matthias Krí¤mer went to Jedox, though I haven't asked him. He won't need to take much time to get to know the products.

The MIS front-end tools are still being developed in Prague. The Web application development tool was originally created by Intellicube, which Christian Raue (founder of Jedox) sold to MIS. The development team was partly made up of redundant Alea developers. I was later product manager for that product, now known as Application Studio. Unsurprisingly, the Jedox front-end tools are very similar to Application Studio.

A couple of people disagreed with my somewhat pessimistic analysis of PowerPivot's (Gemini) prospects. So I decided to jot down a few more details on how the product works as a database. I still stand by my original comments, but it is interesting to look at what the advantages of the product are as well.

PowerPivot is an interesting approach to dealing with the problem of data storage in Excel. Microsoft Excel users often store data in Excel as if it were a database. But Excel is not a good database for several reasons:

• It fails to separate formats and raw data in an orderly way.
• It does not provide an easy way to share data among users.
• It has no straightforward means of applying calculations to more than a single cell.
  

As a result, there are lots of issues that come up in projects making heavy use of Excel. In particular performance, accuracy, reliability and versioning are compromised. Gemini deals with some of these issues.

Gemini addresses the issue of data storage in Excel in the most simple and obvious way. It provides a new method of storing data in an Excel file that is separate from the formatting and calculations in Excel. It does not, by default. store the data outside the Excel file. But although PowerPivot data is stored in the same file as Excel it is stored separately from the rest of the Excel data.

To understand exactly what is going on we need to take a step back and look at how the latest Office products store data. Basically the new Office format is a zip file which contains several XML files. One Excel file contains the Excel spreadsheet Excel itself. Other objects such as charts are stored separately in the same zip file as the spreadsheet file. (Actually this is a simplification. Each sheet is stored in a separate file, and there are other complications involving shared content.) The zip file has the format of a normal zip file even though it has the extension xlsx and not the .zip extension. But don't take my word for it -- you can see the exact internal format of Excel for yourself by simply opening any Excel 2007 file with a data compression program like WinRAR.

In Office 2010 it will be possible to store additional data in another separate file in that same zip file and to access that data using the database interfaces provided by Excel. These database interfaces are the pivot table and the database spreadsheet formulas. From the outside the file won't look any different -- except maybe a little bigger. Or maybe a lot bigger. The much ballyhooed column compression only works in memory.

Office 2010 also addresses the issue of sharing data between users. I guess this option is really intended for Word more than for Excel, but it works across te entire product line. In any event an Excel sheet stored on a server will be available to multiple concurrent users with a local installation of Excel or in Sharepoint. The idea is that you create an Excel file and put it on a server where all your colleagues can access it, and the product allows you to edit the file simulataneously, even updating changes made by others. This sounds like a rough and ready solution to the second problem listed above, although it does not provide any security.

The final issue that seems important to me is applying a calculations to a large number of elements. And here, too, PowerPivot does offer some respite. Calculated columns can be added to the table. This is a Good Thing because it save the user from the difficult and error prone procedure of copying the formula down the entire column. It is not a replacement for multidimensionality, because the "database explosion" effect means that you will need to define a lot of columns to imitate multidimensional aggregation. But plenty of Excel-based solutions get by without this so I guess it won't always be an issue.

The upshot is that the product really does offer departmental users some relief from Excel chaos by treating the worst symptoms. And it does so without being disruptive, a key design consideration in viewof the size of the Excel user base. So I can understand some people's enthusiasm.

Information is still a bit sketchy on Gemini,but it is already fairly clear where Microsoft is going with it. The clarity comes partly from Microsoft's public statements and partly from a sober analysis of the constraints Microsoft's BI program is subject to.

Microsoft will be offering three ways to view Gemini data. The first way is the grid they have been presenting in there demos. Take a close look at that grid. They always start it in Excel, subliminally -- or not so subliminally -- suggesting that the data is in Excel, but that is not the case at all. In fact it is just a separate grid that floats above the Excel window. The Gemini grid has nothing to do with Excel and is pretty basic as a reporting tool.

The second and third ways of viewing Gemini data are not new at all. In fact they are just the same tool that are now used for viewing Analysis Services data -- Reporting Services and the Excel Pivot Tables. Although both are adequate tools for some purposes, they tend not to score particularly well in customer satisfaction surveys. Perhaps more important they do not offer much in the way of features that are specific to the data model of Gemini.

The marketing role of the front end is very different in QlikTech. QlikTech's main marketing argument is "associative analysis" which it claims is a revolution in OLAP. Whether or not you agree with that claim, there is no doubt that the product delivers a specific set of features to make good on it. Specifically, the selection behavior of the list objects with their characteristic green shading, automatic hiding of unassociated elements in other objects and so on are specialties of the product that visualize the concept of associative analysis.

Arguably the real reason for this is that the front end is out of the hands of the creators of Gemini. After all Microsoft's BI front end is Excel. Excel has perhaps a half a billion users, and most of them would just be confused by any radical change in the interface.

The data import tools for end users look pretty simple. This is an issue that often gets forgotten in BI sales presentations, because data import is not a topic that end users like to get involved with. It is also a key weakness in QlikView, which offers a few automatic options but quickly switches to a proprietary scripting language. So far Gemini looks even weaker. But strengthening them would be to compete with the tools SQL Server already offers.

So with Gemini Microsoft isn't offering anything new in the front end or data import. What this means is that Microsoft is betting on the in-memory feature itself to make Gemini attractive to the end user. Microsoft has very little in the way of analogous features for the end users. Instead it has emphasized the issue of scaleablility, always a popular marketing claim but not the key issue in a self service environment.

So Gemini will have to sell itself on the technical merits of in-memory data management.

Still digesting Cognos, IBM is now investing in high end analytics -- Reuters says it splashed out $1.2 bn for the data mining and predictive analytics specialist SPSS. That is a remarkable sum, considering that it’s a 40% premium on the value of the stock and about 25 times the company's annual profit. The takeover is great news for veteran CEO Jack Noonan who joined the company in 1992 and is now approaching retirement age. This is especially true considering that the success of the open source R language is squeezing proprietary data mining vendors.

This isn't IBM's first foray into data mining. In 2000 BARC published a study showing that IBM's Intelligent Miner was one of the best products on the market from a functional point of view, right up there with SAS Enterprise Mining. Ultimately however, IBM never had a lot of success with Intelligent Miner. IBM has been moving out of the market step by step and now only offers a few specialized solutions. And when IBM announced the SPSS deal Intelligent Miner was only mentioned in passing as an execution engine for SPSS solutions.

Maybe the Cognos acquisition changed things for IBM. SPSS is a Cognos OEM-Partner providing advanced analysis features to Cognos. Cognos is more focused on reporting and basic analysis so the SPSS products show no real overlap. On the other hand Cognos has also made its forays into the data mining business, including its purchase of Forethought, part of a once fashionable but now forgotten desktop data mining strategy.

Data mining and advanced analytics companies have carved out an interesting niche for themselves. Bringing data mining to the masses in the form of simplified data mining has not been a very successful idea, probably because the concepts are just to complex for the average business user. And BI companies have worked for decades to replace custom modeling with pre-built applications, but have had little success. But both SPSS and SAS successfully sell applications such as analytic CRM and vertical solutions for the financial industry.

SAS is strong on data management and advanced analysis. IBM now has assets strengths in both areas. SAS is still stronger in specialized analytic applications, but SPSS has been successful in this area as well. Furthermore IBM is likely to emphasize pre-built applications – as they have for Cognos.

SAP Business Objects is another company that will have to adjust to this acquisition. It had a very close relationship with SPSS, because SAP -- like IBM Cognos -- does not have much to offer in this market segment. SAP will have to look around for a new partner, perhaps KXEN or another smaller vendor.

The Google Chrome operating system would basically be a browser and some drivers to connect to the underlying hardware. It would be the realization of Marc Andreessen's dream in the 90s reducing Windows to a device driver.

It only make sense for a client. The idea would be to run programs with a Web client that don't require any local installation. That way it doesn't matter what the underlying system actually is.

Google has been pushing HTML 5 pretty hard, and Chrome OS is a good reason to. For example, HTML 5 has a tag to show vidoes, which means you would need a plugin. That means shifting the burden to the browser itself. The more the browser does the more viable the Chrome OS idea is.

It's notable that a lot of BI tools would work on Chrome. For example, a lot of the sprawling Information Builders would work fine, as would MicroStrategy -- they run on DHTML. So would Business Objects WebI, which is Java based. I'm guessing Java will work. Cognos would have some issues because some of the studios require ActiveX.

And so on. I'm not attempting to do a complete survey here, just point out that BI vendors have already done quite a bit for Web support, and ultimately, a Web strategy is a Windows-free strategy.