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SQL's Reporting Services: A Market Bombshell Like OLAP?

Later this year, Microsoft will revamp its SQL Server 2000 database with a new reporting services add-on.

SQL Server 2000 Reporting Services will make its debut as business intelligence (BI) vendors are still struggling to come to terms with the wave of consolidation that rocked the BI industry this summer. Within weeks of one another, enterprise reporting standouts Brio Software and Crystal Decisions were gobbled up by competitors Hyperion Solutions Corp. and Business Objects SA. Then, in early September, BI power Cognos released a new operational and production reporting suite, dubbed ReportNet. Meanwhile, another BI giant, MicroStrategy, is prepping a production reporting tool, designed to complement its traditional strengths in ad hoc reporting, for release later this year.

There’s a not-so-ancient Chinese epigram -- still pretty common on the fortune cookie set -- which says: “May you live in interesting times.” That’s precisely the situation that awaits SQL's Reporting Services. It remains to be seen if the turmoil of the past summer makes it easier for Microsoft to establish a foothold for its fledgling reporting services -- or, conversely, strengthens the hands of established vendors such as Actuate Corp., Business Objects or Cognos. But let’s crack open another fortune cookie and attempt to find out.

BI vendors putting on a brave face

Microsoft positions the services as a one-stop platform for the creation, management and publishing of ad hoc or production reports. Microsoft says that its technology will bring robust reporting to a SQL Server business intelligence (BI) stack that already includes online analytical processing (OLAP), data mining and extraction, transformation and loading (ETL) features. Because of this, Microsoft officials expect that the SQL Reporting Services will have an immediate impact on the reporting market.

“We think that it’s going to have a definite impact … especially for customers that are using Visual Studio .NET,” says Tom Rizzo, group product manager for SQL Server with Microsoft. “It’s going to make it easier and more practical for them to expose reporting in the applications that they build.”

That’s an optimistic projection from a vendor -- Microsoft -- with very little experience in the space. What’s surprising, however, is that many established enterprise reporting vendors are paying lip service to the software giant’s fledgling reporting product. In fact, some vendors say, Microsoft's entry addresses an important market segment and will be a welcome contribution.

“I think that’s exactly the type of low-end, very specific purpose-oriented type of reporting solution that some users need,” says Michael Branchaud, director of product marketing for Cognos. “I could see that being a nice complement to a Microsoft platform that they’ve already built that application [which has a reporting requirement] on.”

Adds Eleanor Taylor, manager of BI strategy with SAS: “Certainly, it does a good job of enabling the small or medium enterprise to leverage that [reporting] capability, but it also does a great job of raising the awareness and the importance of this kind of thing.”

The upshot, then, is that reporting vendors aren’t sweating Microsoft’s forthcoming reporting technology -- they’re just trying to pigeonhole it.

“It sounds like something that will appeal to [developers] if they do not already use reporting [tools], something that lets them build a basic reporting experience into their applications, so we think that’s a good thing, as far as it goes,” says Sanju Bansal, chief operating officer of MicroStrategy. “Our customers are typically trying to do more with reporting, which is one of the reasons that we’re not worried about it.”

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Not a giant-killer

When it appears, SQL Server 2000 Reporting Services won’t be a giant-killer -- nor is it intended to be. It’s designed to provide a solid set of reporting services -- including support for ad hoc and operational reporting -- that should appeal to traditional report developers and consumers alike. Microsoft also expects that the services will expose reporting capabilities to rank-and-file developers, largely on the basis of its tight integration with Microsoft’s Visual Studio .NET integrated development environment (IDE). Hundreds of thousands, if not millions, of programmers already feel at home in the Visual Studio .NET IDE.

“We’re saying, ‘Let’s just leverage the best development tool out there, let’s just integrate with Visual Studio so that they can easily build reports,” says Rizzo, “They can use the debugging that they’re used to in Visual Studio, the data tools that they’re used to in visual studio, so if you’re a Visual Studio customer, shame on you if you don’t use [SQL Server 2000 Reporting Services], because you’re missing out on one of the most integrated solutions out there.”

The idea, says Rizzo, is that developers can exploit the technology to embed reporting capabilities into Visual Basic, C# and other applications. Elsewhere, report developers or power users can use the services to create reports that pull data from a data warehouse and then distribute them to recipients through a subscription model or by e-mail, or publish them to a corporate portal. Granted, he acknowledges, existing ad hoc and production reporting tools let them do all that (and more), but for the price -- free for co-deployment along with SQL Server 2000, pay-for-use when deployed by itself -- Microsoft's Reporting Services is hard to beat.

Theodore Woo, an application developer with a large telecommunications company, says a strategy of this kind actually makes a great deal of sense. His company does application hosting for many of its customers, Woo says, and supports a lot of applications that have reporting requirements. The problem, he says, is that developers don’t always get to specify the reporting tools that get used. What happens instead, he laments, is that someone further up the food chain usually makes that decision -- based on whatever is on sale. As a result, developers often end up supporting a range of reporting tools through various degrees of obsolescence. “This sounds like it addresses most of the reporting requirements that we have, and it is also available at a can’t-miss price that is very likely to appeal to my supervisors,” he says.

Analysts are optimistic, citing Microsoft’s successful track record with the free Analysis Services and Data Transformation Services that it has bundled with SQL Server. “My impression is that they are developing a fairly robust set of reporting services, but it remains to be seen what they actually deliver,” says Wayne Eckerson, director of The Data Warehousing Institute (TDWI). “I think reporting services will be more popular than the analytic services … which they released a few years ago.”

Even so, says Mike Schiff, a senior analyst with consultancy Current Analysis, it’s too much to expect Microsoft's new offering to compete with established reporting suites from powerhouses such as Actuate, Cognos, Crystal Decisions, MicroStrategy and others -- at least right away. “Initially, [these vendors are] going to downplay it, because it’s a first-generation product, it doesn’t have the features and the bells and whistles of their own products,” he says. “But they’d better damn well keep an eye on it, because Microsoft tends to add more functionality with every new release. The endpoint could really cause the enterprise reporting vendors a problem.”

As first generation products go, Schiff has high praise: “I think [reporting services are] a great way to expose reporting [capabilities] to a lot of these guys who use Microsoft development tools, and they’re also great for some of Microsoft’s partners, like [analytics vendor] ProClarity [Corp.].”

Although some vendors have tried to further pigeonhole the technology as a Windows-only play, Microsoft’s Rizzo says it can support Oracle data, DB2 data and other OLE DB- or ODBC-compliant data sources. Think of it like Microsoft's OLAP services in SQL Server, which has found use by some customers as a tool for analyzing data from those non-Microsoft platforms.

Culling the herd

Given Microsoft’s track record, analysts say that Actuate, Cognos and other vendors should be wary of the software giant’s upcoming foray into the enterprise reporting market. After all, Microsoft was a relative late-comer to the office productivity space, for example, but has effectively buried competing applications from IBM’s Lotus Software Group and Corel. Similarly, Microsoft’s Internet Explorer Web browser has reduced the once-dominant Netscape Web browser to niche status.

“When [Microsoft] enter[s] a market, the industry has to pay attention. Over time, they will become a threat,” says Schiff. “Right now, heads will turn, and [reporting vendors] probably won’t lose many sales in the short term. The question is, what will this functionality evolve to over time?”

When pressed, BI vendors acknowledge that Microsoft’s entry into the reporting space is a cause for concern, but tend to downplay the software giant’s potential for disruption. Says Cognos’ Branchaud: “We’d be pretty naïve if we didn’t think they were going to move up that food chain. But the way that we look at it is that … there will absolutely be a compelling need for this enterprise reporting layer, so while Microsoft will no doubt do this, the leaders will survive and thrive, because what Microsoft does is elevate the conversation.”

Cognos and its competitors argue that once new users or non-traditional consumers get a taste of what reporting can do for them, they’ll opt for more full-featured solutions. “A lot of times, BI is still at the department level, where there’s less knowledge about [reporting],” says SAS’ Taylor. “But Microsoft, being the marketing giant that it is, really helps validate where we’re going with reporting. They can educate and raise the awareness about this.”

That’s not to say that Microsoft’s entry into the enterprise reporting market will be without potential ramifications for all BI players. In fact, if Business Objects hadn’t acquired Crystal, Schiff speculates, the reporting specialist could have expected to face stiff competition from Microsoft in the low-end reporting space. “Crystal's feeling the most threatened, [because] they’ve got really tight integration with Microsoft, they ship bundled with Visual Studio .NET,” he points out. But Crystal’s status as a Business Objects asset -- coupled with the widespread belief that Business Objects will ratchet up integration between Crystal’s tools and its own -- alters the calculus with which not only Microsoft, but many ISVs, approach the issue of bundling Crystal’s tools with their own products. The upshot, says Schiff, is that while ditching Crystal for its own technology may be a foregone conclusion in Microsoft-land, it’s also an option that’s on the table for other Crystal partners. “With Crystal off the market, a lot of these guys … may have to find another partner, because I doubt if they're going to want to put money into Business Objects’ product,” he says.

MicroStrategy’s Bansal agrees. “I think that the low-end market where Crystal has such a presence is squarely in the gun sights of Microsoft, so they’ll be the first to suffer,” he argues. “We expect that Microsoft will unbundle Crystal from Visual Studio and then create a set of services to port Crystal’s [file] format over to its own reporting services.”

Some industry watchers have even suggested that Microsoft’s imminent entry into the enterprise reporting space may have been one of several reasons that Crystal executives decided to abandon IPO plans and instead started shopping the company around to BI vendors. Crystal, which is in a quiet period pending its acquisition by Business Objects, did not respond to interview requests.

Even as some vendors stand to lose share, others will no doubt profit, analysts say. “If they hold true to Microsoft's traditional strategy, they will provide strong base-level functionality and promote this to partners who will develop applications based on it,” says TDWI’s Eckerson.

One Microsoft partner that expects to exploit Microsoft-provided reporting to great success is analytics specialist ProClarity. “We have chosen not to be in the reporting business, but instead we’re concentrating on perfecting our analytic tools to help people understand what information means,” says Clay Young, vice president of marketing. “For some time, though, we’ve had this issue with people wanting to just get reports to folks, but we’ve resisted delivering any technology that would be sort of redundant with Cognos, Crystal and some of the other vendors.”

Because of this, Young says that ProClarity is excited about the SQL reporting technology, for which it’s building a front-end dashboard complement. “It solves what’s been a perceived weakness in our product family, which is once you get to the point of discovering something and wanting to share it with others, how do you distribute that to thousands of users?”

ProClarity’s is a text-book case of the insta-reporting-type scenarios that Microsoft believes its technology will enable. The analytics vendor has traditionally supported a proprietary thin client reporting component that, Young concedes, “is not optimized for formatting, is not optimized for mass distribution to thousands of users. It’s just a very basic way of sharing something that you’ve discovered, of sharing starting points for people to look at.”

When ProClarity delivers its dashboard, Young says, “we’ll be able to bring relational reporting and internet analytics together in our dashboard client, and also integrate our live analytic experience and relational reports out of the reporting services repository.”

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