MicroStrategy: Comeback StoryBy Brian P. Watson | Posted 2006-11-06 Email Print
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MicroStrategy recovers by building off its niche technology.
Customers of MicroStrategy say its product design sets it apart from the competitionand the firm's recovery from accounting woes is helping to re-solidify its place in the market.
MicroStrategy carved out a niche early on in the business intelligence arena. Dating back to 1993, the vendor favored relational online analytical processing (ROLAP) technology, which tapped directly into relational databases, over MOLAP, or multidimensional online analytical processing, which requires data to be stored in a separate array outside the database. (Business Objects and Microsoft have since released ROLAP-based tools.)
Another feature of ROLAP is that it uses structured query language, or SQL, reporting tools to drill into relational databases. (MOLAP, which works with multidimensional databases, requires OLAP-based reporting tools.) MicroStrategy's software can optimize its SQL tools to improve search functions, according to Steve Robinson, director of business intelligence for AutoTrader.com, an online automobile market.
AutoTrader uses MicroStrategy 8 software, which combines querying, reporting and analytical tools, to measure how many people check out new features or respond to various advertisements on its Web site.
The software helps AutoTrader track its market share in different regions by categorizing its 3.5 million cars by make, model, year or location. The tools also generate reports for large advertiserslike manufacturers who offer certified pre-owned sales programsthat tell how many times that advertisers' inventory appeared on the site as a search result as well as how many AutoTrader users contacted the dealer by e-mail from the site.
Miles Mewherter, vice president of application development and enterprise reporting for Dick's Sporting Goods, says the employees who are "casual" or light users of the analytical tools has increased tenfold since the Pittsburgh-based athletic goods retailer began using MicroStrategy's Business Intelligence Platform 8. "[Version 8] was the one tool that could meet the needs of everyone," he says.
Dick's uses the software to track its private-label products. For example, the retailer analyzes what types of colors or fabrics are most popular throughout its stores, and then reports those numbers to manage nationwide inventory.
More recently, Dick's began using the software in its marketing department to analyze customer purchases and then promote products. At a point of sale, a shopper swipes a membership card, which helps Dick's compile that buyer's preferences. It then aggregates that buyer and others with similar purchasing histories, and targets them for specific promotions. So, as Mewherter puts it, "If you're a golf customer, we know to send you golf e-mails."
Mark LaRow, vice president of products with MicroStrategy, says the vendor can deliver graphical images by e-mail via any Web browser. LaRow also points to MicroStrategy Office, software that allows users to access and refresh MicroStrategy reports via Microsoft Office.
It hasn't been all smooth sailing for MicroStrategy. In 2000, amid accusations of improper accounting techniquessuch as booking new customer revenues before they were paidMicroStrategy was forced to restate earnings. In 1998, after originally claiming $106.4 million in revenue, the firm restated to $95.5 million; in 1999, initial filings of $205.3 million were chopped down to $151.3 million.
The company has rebounded, though, posting revenue of $268.66 million in 2005, up 77% from its 1999 total.