MicroStrategy: Comeback Story

By Brian P. Watson Print this article Print

MicroStrategy recovers by building off its niche technology.

Customers of MicroStrategy say its product design sets it apart from the competition—and 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 advertisers—like manufacturers who offer certified pre-owned sales programs—that 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 techniques—such as booking new customer revenues before they were paid—MicroStrategy 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.

Business Intelligence

MicroStrategy: At A Glance
1861 International Drive
Mclean, VA 22102
(703) 848-8600


Michael J. Saylor
Chairman, President & CEO

Jeffrey A. Bedell
Chief Technical Officer

MicroStrategy 8 integrates disparate query, reporting and online analytical processing (OLAP) interfaces for report production.

Reference Checks

Steve Robinson
Dir., Business Intelligence

State Of Tennessee
Richard G. Taylor
Project Mgr., Finance and Administration

Dick's Sporting Goods
Miles Mewherter
VP, Enterprise Reporting

U.S. Postal Service
George Wright
Mgr., Corporate I.T. Portfolios
(800) 275-8777

Jim McKeown
Dir., Business Intelligence

2006FYTD* 2005FY 2004FY
Revenue $143.60M $268.67M $231.21M
Net income $31.55M $64.74M $168.31M
R&D spending $16.98M $31.47M $24.92M
*For six months ended June 30, 2006

This article was originally published on 2006-11-06
Associate Editor

Brian joined Baseline in March 2006. In addition to previous stints at Inter@ctive Week and The Net Economy, he's written for The News-Press in Fort Myers, Fla., as well as The Sunday Tribune in Dublin, Ireland. Brian has a B.A. from Bucknell University and a master's degree from Northwestern University's Medill School of Journalism.

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