IBM's Business Intelligence Plan Focuses on Partners, Middleware

by Alex Woodie

When IBM revealed it was leaving the market for online analytical processing (OLAP) software earlier this month, it spawned competing ideas as to why Big Blue was abandoning such a profitable sector of the software market, and what its business intelligence strategy would be going forward. As it turns out, IBM is planning to do the same thing in business intelligence as it is doing in other solution areas: Rely on partners for the applications and then sell lots of its own infrastructure tools, hardware, and services around them.

To recap, it's been less than a month since IBM formally ended the nearly decade-long OEM relationship it had with OLAP software provider Hyperion, and the five-year relationship it had with the SPSS-ShowCase organization. IBM is working closely with both Hyperion and SPSS to transfer the customers that use DB2 OLAP Server and DB2 OLAP Server for iSeries products back to Hyperion and SPSS. (See "IBM, Hyperion, and SPSS Part Ways on DB2 OLAP Server" for more on the transfer of licenses and customer support.)

As to why IBM ended the relationship in the first place, it really shouldn't be much of a mystery. After 10 years, IBM had about 320 customers running its DB2 OLAP Server version of Hyperion's Essbase software on distributed platforms, and about 80 running the OS/400 version based on the product from SPSS, which in January renewed its deal with Hyperion that gives it exclusive rights to port Essbase to OS/400 and sell the resulting product. Considering that Hyperion and SPSS got a cut from IBM's DB2 OLAP Server sales, and that the products were essentially the same ones that customers could get from the original developers, IBM really didn't have much of a story to tell in this area and could never match the margins of its partners. A lot of effort was being spent duplicating efforts and complicating the support process, and that is no way to run a profitable company in this day and age.

But exit the OLAP market completely? Surely IBM, creator of the relational database and developer of many sophisticated analytical technologies over the decades, had a contingency plan to fill this sudden gap in its business intelligence product line? Surely IBM isn't ceding this market to its chief database rivals, Oracle and Microsoft, both of whom develop their own multidimensional OLAP, or MOLAP, software on top of their relational technology? MOLAP, with its capability to house a database with a dozen dimensions and thereby allow users to dig up valuable pieces of information (such as a sudden change in buying trends) that would otherwise remain hidden in separate relational data stores, is too powerful a software solution for IBM to abandon, especially considering the Fortune 100 clientele that are some of the biggest MOLAP users.

IBM is not giving up on this market, according to Richard Wozniak, IBM's business intelligence marketing director. In the post-DB2 OLAP Server days (which officially start on February 1, 2007, but which unofficially started this month), IBM will work with its strategic partners, like Hyperion, SPSS, and several others, to deliver the MOLAP and industry specific functionality on top of its DB2 database, its eServer line, and its storage hardware.

"Right now, we're sticking with those five or six companies that are really excellent multidimensional vendors. Hyperion, Cognos, Microstrategy, Business Objects," he says. "Most of our customers going into business intelligence deals have already selected one of those partners as key component of a solution."

DB2 Cube Views

"Our strategy has been to leverage those technologies and be the best provider of underlying information services for them as we can possibly be," Wozniak explains. "That's why we build Cube Views as a tool to interface with their underlying OLAP engines. That's been our motto: 'Model once, use anywhere OLAP.' What we're trying to say is, there are lots of advantages to hosting that data in the database for the OLAP users. We've had very good buy-in with our strategy of turning DB2 Data Warehouse Edition, which Cube Views is part of, to be the ultimate database for data warehousing. We're not going to try to clone their products in miniature, and compete with them nose to nose."

The strategy, basically, is to make DB2 Cube Views a generic driver for the range of OLAP engines on the market. This makes it useful for data integration and database migration purposes, among others.

For example, a user who built a multidimensional database, or a "cube," with Hyperion's Essbase product could bring it into DB2 using Cube Views, and then export that cube to MicroStrategy, Wozniak says. Another example is the corporation that uses different analytical applications in different divisions. The accounting division, which uses Siebel, might consider Mexico to be part of North America, while the sales division, which might use Essbase, considers Mexico to be part of Latin America, and that creates a problem when it comes to getting one version of Q2 sales figures out of the computer systems. "The idea of model once, use everywhere OLAP, I think has a practical benefit to a lot of companies," Wozniak says.

DB2 Cube Views does not today run on iSeries, and that is one area that IBM is considering bringing new software to OS/400 in the wake of DB2 OLAP Server for iSeries, Wozniak says. "I think we're certainly interested in looking at a comprehensive warehousing solution on iSeries that looks a lot like the ones we have on pSeries and Linux," he says. "That probably implies something very similar to CubeViews, or some analog to it if not the actual product."

However don't take DB2 Cube Views running natively on OS/400 as gospel yet, since IBM hasn't formally announced any plans to do this; but, that said, now is the time to let IBM know you want native support if you do, so it can get to work on it now rather than later. Keep in mind, too, that IBM's future data warehousing offerings for the iSeries may not be entirely OS/400-based, since the iSeries is no longer itself solely OS/400-based. IBM can run AIX and Linux programs natively now. So Big Blue is looking at whether it can run certain components of the solution, such as DB2 Cube Views Advisor component, which specifies how views of queries should be laid out within the OLAP tool, in a Linux partition. "We have a few different ways to solve the problem," Wozniak says. "The good news is, not only is the data there, but the MQT [materialized query table] is also there" running natively in OS/400's DB2/400 database.

Alphablox, another business intelligence technology that IBM acquired earlier this year, does not have much of an iSeries story, Wozniak says. The software is intended mostly for developing Java Server Pages applications and as such is much more suited to Unix and Linux than either OS/400, or Windows, for that matter, he says.

Tuning Business Intelligence

IBM is looking to boost its OLAP and data warehousing story for AIX and Linux through a new program it calls the Balanced Configuration Unit (BCU), which was announced last week. Under the BCU offering, IBM does the grunt work of figuring out how best to install and integrate all the parts (OLAP engine, query tools, ETL tools and data movers, relational data warehouse, server platform, RAM, disk, and networks) that go into building a business intelligence application on the pSeries server. It involves sales as well as technical personnel who can tell exactly how much CPU, memory, disk, and I/O a given configuration needs, to save the customer time and money. While only available on the p5 570 running AIX today, IBM will be doing BCUs for Linux next, followed by Windows, presumably on the xSeries "Hurricane" X3 platform. The iSeries doesn't really need a BCU offering, Wozniak says, because it is already so well-integrated to begin with.

"Like any other business, we're continually evaluating our strategy. I have the job of business intelligence and data warehousing strategy. In this area, I'm not expecting [any large changes]. We're achieving the growth numbers we're trying to get," Wozniak says.

Those growth numbers are coming from IBM's strategy of providing infrastructure tools, and having the applications themselves come from partners. "I think we're pretty sincere about that. We're trying to make that strategy real and make it work, and the feedback we get shows that customers like IBM as technology and infrastructure provider and like being able to buy applications from a vendor rooted in the industry they're in," Wozniak says. "I think customers are pretty savvy. There has to be a reason that OLAP vendors are the fastest growing software companies, with several approaching $1 billion. We're interested in partnering with them."

Acquiring one of those successful OLAP vendors does not seem to be in the cards at this point, even though it could provide IBM with a solution to go toe-to-toe with Oracle and Microsoft. IBM, it would seem, is looking beyond its current hand.

"I don't feel I'm leaving very much on the table at this point," Wozniak says. "We're allowing people to go out and get best-of-breed applications, like Siebel Analytics, and to choose pretty profoundly deep technology, like Cognos or Hyperion. It's part of allowing customers to get the best applications in their shops. I think those companies [Microsoft and Oracle] ask customers to pay a pretty big price, for no real customer benefit, so they can, over time, build out the all-in-one portfolio they want. I'm not sure what the customer benefit is, except maybe having one 800 number to call."

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