It was always Microsoft's intention to take the Panorama OLAP multidimensional technology and integrate it into its BackOffice family of products. In the past year the technology acquired from Panorama has been developed into Microsoft's "Plato" OLAP engine, which will be integrated into the next release of SQL Server. The company's overall goal is to give customers a full suite of products for what it describes as "easy and effective retrieval and analysis of enterprise data". At the time of the acquisition David Vaskevitch, vice president, database and transaction products at Microsoft, said: "The open interfaces we will create will be of great benefit not only to our customers but to many players in the database business." The open interface that Vaskevitch was referring to is a new API called OLE DB for OLAP, the specification for which was made available in September 1997. At the time, 18 software companies and application developers announced support for this specification. Microsoft hopes that widespread adoption of it will give customers a better choice of OLAP products, easier access to information and lower product development and deployment costs. Nigel Pendse, a world-renowned expert in the field of OLAP, believes that Microsoft's decision to create an open interface, namely OLE DB for OLAP, has been an outright success. In his report on the technology, he states: "The promise to create open interfaces has indeed happened, and Microsoft's OLE DB for OLAP now looks set to become the industry standard OLAP API." Pendse said that this is a remarkable feat, even for Microsoft, as the company has probably created a widely accepted OLAP standard interface before even shipping its first OLAP product. Along with OLE DB for OLAP, which will undoubtedly become an industry standard API, Microsoft will also dramatically change the face of OLAP. To use Pendse's words: "Overnight, Microsoft clearly intends to turn OLAP servers into a commodity." Pendse believes that Microsoft will apply its "legendary" business model of generating huge revenues through selling enormous volumes of software products at low prices, to the new OLAP Server. Although final prices for SQL Server 7.0 are not known, Pendse is confident that they are likely to be a small fraction of the prices charged for today's high-end OLAP servers. He said that while there may be a modest price rise between SQL Server 6.5 and 7.0, Microsoft is unlikely to raise prices dramatically as this would be in complete contradiction to its business model. The report states that a retail price for a 10 user system is less than $2,000 (#1,226) and even a 50 concurrent user SQL Server 6.5 Enterprise Edition Retail Package costs less than $11,000 (#6,748). This, Pendse points out, is considerably cheaper than products such as Essbase, Express, Holos, DSS Server or Gentia which are priced close to $100,000 (#61,350) region for a 10 concurrent user server licence. In terms of a shake-up of the OLAP market resulting from Microsoft's debut with Plato, Pendse feels that specialist end-user oriented financial OLAP servers are pretty safe, as the Microsoft offering is aimed more at data warehouse implementations. Pendse predicts that high-end OLAP, from Oracle and Seagate risk losing significant market share, and they will probably have to push their products into more and more specialist niches. Alternatively, they could, he believes, slash their prices considerably. They may also have to move more strongly into selling applications rather than technology, and bundling their OLAP technology with other products. These moves would obviously be beneficial to the end user who will reap the rewards of any forthcoming price war or bundling deal. The desktop OLAP vendors should be short-term beneficiaries, said Pendse, because the Microsoft initiative will generate a huge demand for OLAP clients. But they will have to deliver products that are very easy to deploy and optimised for use with the OLE DB for OLAP API. Richard Hamblin, product manager for middleware technology at Microsoft, said: "Our data warehouse solution is not just the Plato OLAP engine. We are covering everything from data transfer to analysis. We are making technology available to everyone by making the cost attractive to customers." Hamblin said that the price of SQL Server 7.0 with the Plato OLAP engine will be approximately the same as SQL Server 6.5 today. Roger Gilheany, business development director at Cognos, said: "From the very beginning we have had among the closest relationships with Microsoft." He added that the company is working actively on the OLE DB OLAP API with Microsoft and is on the Plato beta programme. "We do not see Microsoft as a threat. The price of OLAP servers is bound to come down. The cost per seat will be impacted which means greater access and more users. We think this is great. All we need to do is keep close to Microsoft and give them (Microsoft) good input." Business Objects, another contender in the OLAP market, was also encouraged by Microsoft's entry. Charles Nichols, marketing director at Business Objects, said: "We announced we would support Microsoft. We see this as a significant opportunity." Nichols believes that the market is moving towards datamarts and Microsoft's Plato engine will have a positive effect. "[The fact that] Microsoft is in this market will undoubtedly popularise the concept of data warehousing to a larger audience."
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