Reducing Total Cost of Ownership: Delivering Cost Effective Enterprise Business Intelligence. A White Paper by MicroStrategy

Transcription

1 Reducing Total Cost of Ownership: Delivering Cost Effective Enterprise Business Intelligence A White Paper by MicroStrategy

2 Copyright Information All Contents Copyright 2008 MicroStrategy Incorporated. All Rights Reserved. MicroStrategy, MicroStrategy 6, MicroStrategy 7, MicroStrategy 7i, MicroStrategy 7i Evaluation Edition, MicroStrategy 7i Olap Services, MicroStrategy 8, MicroStrategy Evaluation Edition, MicroStrategy Administrator, MicroStrategy Agent, MicroStrategy Architect, MicroStrategy BI Developer Kit, MicroStrategy Broadcast Server, MicroStrategy Broadcaster, MicroStrategy Broadcaster Server, MicroStrategy Business Intelligence Platform, MicroStrategy Consulting, MicroStrategy CRM Applications, MicroStrategy Customer Analyzer, MicroStrategy Desktop, MicroStrategy Desktop Analyst, MicroStrategy Desktop Designer, MicroStrategy ecrm 7, MicroStrategy Education, MicroStrategy etrainer, MicroStrategy Executive, MicroStrategy Infocenter, MicroStrategy Intelligence Server, MicroStrategy Intelligence Server Universal Edition, MicroStrategy MDX Adapter, MicroStrategy Narrowcast Server, MicroStrategy Objects, MicroStrategy OLAP Provider, MicroStrategy SDK, MicroStrategy Support, MicroStrategy Telecaster, MicroStrategy Transactor, MicroStrategy Web, MicroStrategy Web Business Analyzer, MicroStrategy World, Alarm, Alarm.com, Alert.com, Angel, Angel.com, Application Development and Sophisticated Analysis, Best In Business Intelligence, Centralized Application Management, Changing The Way Government Looks At Information, DSSArchitect, DSS Broadcaster, DSS Broadcaster Server, DSS Office, DSSServer, DSS Subscriber, DSS Telecaster, DSSWeb, ebroadcaster, ecaster, estrategy, etelecaster, Information Like Water, Insight Is Everything, Intelligence Through Every Phone, Your Telephone Just Got Smarter, Intelligence To Every Decision Maker, Intelligent E-Business, IWAPU, Personal Intelligence Network, Personalized Intelligence Portal, Query Tone, Quickstrike, Rapid Application Development, Strategy.com, Telepath, Telepath Intelligence, Telepath Intelligence (and Design), MicroStrategy Intelligent Cubes, The E-Business Intelligence Platform, The Foundation For Intelligent E-Business, The Integrated Business Intelligence Platform Built For The Enterprise, The Intelligence Company, The Platform For Intelligent E-Business, The Power Of Intelligent ebusiness, The Power Of Intelligent E-Business, The Scalable Business Intelligence Platform Built For The Internet, Industrial-Strength Business Intelligence, Office Intelligence, MicroStrategy Office, MicroStrategy Report Services, MicroStrategy Web MMT, MicroStrategy Web Services, Pixel Perfect, MicroStrategy Mobile, MicroStrategy Integrity Manager and MicroStrategy Data Mining Services are all registered trademarks or trademarks of MicroStrategy Incorporated. All other products are trademarks of their respective holders. Specifications subject to change without notice. MicroStrategy is not responsible for errors or omissions. MicroStrategy makes no warranties or commitments concerning the availability of future products or versions that may be planned or under development. Patent Information This product is patented. One or more of the following patents may apply to the product sold herein: U.S. Patent Nos. 6,154,766, 6,173,310, 6,260,050, 6,263,051, 6,269,393, 6,279,033, 6,501,832, 6,567,796, 6,587,547, 6,606,596, 6,658,093, 6,658,432, 6,662,195, 6,671,715, 6,691,100, 6,694,316, 6,697,808, 6,704,723, 6,707,889, 6,741,980, 6,765,997, 6,768,788, 6,772,137, 6,788,768, 6,792,086, 6,798,867, 6,801,910, 6,820,073, 6,829,334, 6,836,537, 6,850,603, 6,859,798, 6,873,693, 6,885,734, 6,888,929, 6,895,084, 6,940,953, 6,964,012, 6,977,992, 6,996,568, 6,996,569, 7,003,512, 7,010,518, 7,016,480, 7,020,251, 7,039,165, 7,082,422, 7,113,993, 7,127,403, 7,174,349, 7,194,457, 7,197,461, 7,228,303, 7,260,577, 7,266,181, 7,272,212 and 7,302,639. Other patent applications are pending.

3 Reducing Total Cost of Ownership: Delivering Cost Effective Enterprise Business Intelligence I. Executive Summary... 5 II. BI Applications Expand Over Time to Serve Evolving Business Needs... 5 III. Components of Total Cost of Ownership... 7 Staffing Costs: 63% of TCO... 8 Downtime Costs: 15% of TCO Training Costs: 8% of TCO Hardware Costs: 7% of TCO Software and Related Vendor Maintenance Costs: 7% of TCO IV. Conclusion... 18

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5 I. Executive Summary Businesses today are demanding more and more out of the same amount of IT budget. As a result, many Business Intelligence (BI) buyers are seeking better ways to assess an initiative s Return on Investment (ROI). Evaluating ROI requires two components: (1) the business value delivered and (2) the investment costs spent. The business value of a BI application is often difficult to measure, given that value will continue to evolve and grow over the application s lifetime. On the other hand, the investment costs also referred to as Total Cost of Ownership (TCO) often represent a more objective and quantifiable estimate. This paper focuses on how organizations can measure and lower their TCO, thereby increasing their ROI. Perhaps unexpectedly, TCO is dominated by recurring costs and not by one-time purchase costs. Gartner estimates that customers spend up to four times the initial cost of their software license during every year to own their BI applications. The vast majority of these recurring costs are personnel or staffing costs. An IDC research study concludes that staffing constitutes 60%-85% of the overall ownership costs over three years. 1 Staffing costs are driven by two main causes: the effort to manage and maintain a BI application, and the effort to deliver continually changing and expanding business requirements. TCO is nearly always underestimated. Staffing needs, the majority of TCO, are difficult to forecast because BI applications continually evolve and grow. Successful BI applications quickly generate interest from other departments, growing in number of users, applications, data size, and complexity. The BI application may need to serve expanding business lines, new partner extranets or additional geographical regions. As every BI project aims to be successful, the IT manager should also expect that as the BI application matures, so will the variable staffing and ownership costs. As different BI platforms provide different levels of efficiency and scalability, the amount of IT staff required to deploy and maintain the BI application will depend greatly on the BI platform chosen. MicroStrategy s platform delivers efficient and cost effective BI, producing the effect of economies of scale. MicroStrategy s architecture has been designed specifically to minimize the number of personnel needed to maintain and grow BI applications. For example, MicroStrategy provides end user self-service and ease of administration to reduce IT staffing costs. Today s demanding ROI-focused expectations require BI evaluators to carefully consider the differences in platform capabilities and the resulting impact on ownership costs. II. BI Applications Expand Over Time to Serve Evolving Business Needs Organizations have increasingly adopted the goal of pervasive Business Intelligence improved access to information and analysis tools across the enterprise yet, only a relatively small percent of today s workforce benefits from direct access to business intelligence applications. Organizations too often fall short of the goal of pervasive enterprise BI due to both functional and economic limitations imposed by BI technology. Many BI tools do not have the functional capabilities to scale beyond small departmental deployments. In addition, many BI tools are limited in delivering expanding business requirements due to high ownership costs. Today s fast paced, competitive global environment means that business requirements constantly react to marketplace changes, and business applications must be nimble and flexible enough to keep pace. Constantly changing business 1 IDC. Three Year Server TCO. Based on more than 300 interviews conducted across numerous platforms, presented in composite form REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 5

6 requirements may include the need to quickly roll out a new product, report off a new data source, or comply with increased security and regulatory requirements. BI applications must be able to accommodate such dynamic business requirements as well as end user functionality requirements. Successful BI applications typically experience compound growth in size and complexity over a period of several years. According to industry analysts, the goal of adding incremental value carries organizations through BI maturity phases, each with a distinctive usage pattern, analytical tools, and strategic impact. During the initial production implementation, BI requirements usually begin with a departmental data mart providing a few technical power users with static reporting. After a year or two of this departmental self-service reporting, organizations move towards wider adoption. Partners and customers may demand secure Web applications, and the business user population may need to leverage alerts and mobile devices to increase field efficiency. A few years later, after reaching crossdepartmental adoption, better use of data and analysis leads to a snowball effect. As a BI platform gains more users and adds more applications and data sources, organizations benefit from exponentially greater business value. Since enterprise BI applications mature and evolve over time, organizations seeking to leverage TCO analysis must evaluate their potential needs and requirements over a five year time period. Figure 1 shows an example of the effects of expanding business requirements on TCO over a typical five year life cycle of a BI application. BI platforms can be generally grouped into three types Work Group BI, Departmental BI, and Enterprise BI. Figure 1: BI Platform TCO Over Time Total Cost of Ownership $ Work Group BI $ Departmental BI TCO Savings from Using MicroStrategy $ Enterprise BI Time (Years) A Work Group BI technology is designed to quickly meet the needs of a small work group. However, as organizations attempt to add more users or more complex analytics, the IT staff then needs to perform more and more manual and repetitive tasks to grow the application. Increased requirements beyond a few users and static reporting requirements cause Work Group BI ownership costs to increase almost exponentially. MICROSTRATEGY: BEST IN BUSINESS INTELLIGENCE Similarly, Departmental BI technology, optimized for departmental use, is not designed to scale to large data volumes or hundreds of users across multiple departments. For example, in attempting to expand to a Web extranet, Departmental BI applications often need to purchase third party security software to secure Web network traffic and third party server clustering management services to provide server failover. Organizations using Departmental BI find that the TCO increases in proportion to expanding requirements. In contrast, when implementing MicroStrategy s Enterprise BI technology, organizations have the option to increase the application scale without experiencing a proportional cost increase. Enterprise BI platform technologies, such as automated regression testing and a highly reusable metadata, allow organizations to leverage previous investments to meet new requirements quickly and cost effectively. Enterprise BI applications are designed to expand with economies of scale the larger the application, the more savings gained. 6

7 YEAR 1 YEAR 2-4 YEAR 4-5 NUMBER OF USERS 100 Power Users 500 Power Users 2,000 Business Users 700 Power Users 4,000 Business Users 1,400 Partner Users 10,000 Customer Users NUMBER OF DEPARTMENTS North America: Finance and Sales Reporting North America: Finance, Sales Reporting, HR, Inventory Planning Europe: Sales Reporting All departments HOW MANAGEMENT VIEWS BI Management views as cost center Management views as empowering decision makers and monitoring corporate performance Management views as competitive advantage HOW MICROSTRATEGY DELIVERS LOWER TCO Unified BI architecture Powerful development tools Centralized and automated administration tools Enterprise data and user privilege security Automatic SQL tuning Automated change management End user self-service Centralized application monitoring Clustered 64-bit application servers III. Components of Total Cost of Ownership TCO breaks down along two broad areas one time costs and recurring costs. One time expenditures include investments in staffing, hardware, and software of the initial application deployment. Recurring costs include largely the staffing overhead to maintain, upgrade, and expand existing applications; any additional required hardware; and vendor software license maintenance fees. Different BI platforms incur varying TCO depending on specific technical capabilities and the ability to scale. As recurring expenses consume the majority of TCO, these recurring costs are what limit organizations from delivering pervasive BI. Analysts TCO estimation methods vary slightly but still reach similar conclusions: A BI project requires a significant amount of skilled personnel, which represents the largest cost component over the BI application s lifetime. Gartner estimates that customers spend 20-30% of the annual IT budget on software, 40-50% on staffing costs, and the remaining 20-40% on infrastructure costs. Microsoft told the Wall Street Journal that the initial purchase is only 5% of the total cost of owning and maintaining a program. 2 IDC estimates that staffing including maintenance, development, training, down time, and outsourcing, constitutes between 60-86% of typical three year server ownership costs. 3 Many may be surprised to learn that hardware and software each represent approximately only 7% of the overall costs. 4 Over five years, a single trained IT resource can cost more than $500, Therefore, a change in even a few IT resources can add or subtract millions of dollars to an organization s TCO. Figure 2 shows IDC s breakdown of TCO and the significant proportion of staffing costs. Organizations can lower the majority of application ownership costs by identifying technical capabilities that will decrease staffing needs. For example, some tools are aimed at isolated departmental deployments and do not offer IT the ability to re-use objects. As a result of the lack of object reusability, these tools require almost a proportional increase in staff as the complexity of the project increases. Another example of staffing cost savings is a unified administration console. BI tools that require administration through different interfaces create redundancies, inflating 2 Microsoft Wages Campaign Against Using Free Software, The Wall Street Journal, December 9, IDC. Three Year Server TCO. Based on more than 300 interviews conducted across numerous platforms, presented in composite form IDC. Three Year Server TCO. Based on more than 300 interviews conducted across numerous platforms, presented in composite form Assume annual IT salary = $70,000. Assume annual IT salary organizational overhead = $30,000. Assume 5 years. REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 7

8 administrator staffing costs by several magnitudes. As different BI platforms provide different levels of end user selfservice, efficiency and scalability, the amount of IT staff required to deploy and maintain the BI application will vary greatly depending on the BI platform chosen. Figure 2: 3 Year TCO Breakdown, IDC Study 2007 Software 7% Server Hardware 7% Staffing 60% IT Staff Training 8% Downtime-User Productivity 15% Outsourced Costs 3% MicroStrategy s technology was built to offer self-service and optimum performance scaling to thousands of users without requiring a large staff of trained IT professionals. MicroStrategy has developed software that eliminates costs in each TCO category: 1. Staffing, including Outsourced costs 2. Downtime 3. IT Training 4. Hardware 5. Software MicroStrategy optimizes IT staff efficiency through many technical capabilities. For example, MicroStrategy s userfriendly report design enables more users to gain access to the entire data warehouse with fewer report developer resources. MicroStrategy s reliable BI platform provides features such as automated integrity testing and server clustering to avoid the costs associated with the downtime of the BI applications. Capabilities such as MicroStrategy s single flexible interface minimize both developer and end user training time. Hardware costs are cut through efficiencies of scale such as efficient, automatic caching, database specific queries, and eliminating the need for a proprietary cube data staging environment. MicroStrategy s unified platform allows organizations to incrementally add plug and play functionality at the product and user level, one method MicroStrategy provides leverage of software MICROSTRATEGY: BEST IN BUSINESS INTELLIGENCE licenses. This white paper explains how MicroStrategy s enterprise strength, scalable platform and self-service technology enable organizations to achieve pervasive BI at the lowest industry ownership costs. STAFFINg COSTS: 63% OF TCO According to several leading analyst firms including IDC and Gartner, the staffing needs of a BI application represent the largest cost component comprising between 40 and 63% of the total costs over a five year period. 6 Staffing costs are measured in salary plus a load factor to account for benefit and overhead and account for all Full Time Equivalents (FTEs). In North America, the annual staffing cost of a trained IT professional can be conservatively estimated to be 6 IDC. Three Year Server TCO. Based on more than 300 interviews conducted across numerous platforms, presented in composite form

9 $100,000, with $70,000 in salary and $30,000 in overhead. FTEs include consulting and outsourced costs. Staffing resources support the client machines, servers, storage, security, applications, and users. The level of efficiency of the chosen BI platform will greatly impact the amount of required staffing resources. For example, self-service allows users to perform the majority of the tuning required in their reports, saving unnecessary cycles of report developer staffing costs. Technologies with centralized administration reduce administrator resources by several orders of magnitude. A highly re-usable business layer, or metadata, decreases IT maintenance efforts by reducing the amount of reports to maintain. Automatic dependent object updates eliminate manual quality assurance efforts. In choosing a BI platform, BI buyers have an opportunity to select certain technical capabilities that will drastically reduce IT maintenance efforts. MicroStrategy s Unique Report Prompting and Ability for End Users to Surf and Save Decrease the Need for IT Report Developers MicroStrategy s self-service capabilities allow users to analyze at the speed of business, and then to easily create and format their own reports without IT involvement. MicroStrategy report developers build controlled ad-hoc analysis sandboxes that provide templates for thousands of potential report combinations. At report run time, users choose any number of related filters, business criteria, calculations, subtotals, and formatting. Once users have answered prompts on desired report objects and formatting, users can continue to analyze data and then save personal report versions in their profile folders for sharing. This self-service Surf and Save paradigm is similar to saving a bookmark of a Web page. All variations of user built reports will automatically share a common cache. No other vendors provide the ability for users to choose all report objects at run time. The lack of these self-service capabilities in other BI products results in IT building, maintaining, testing and upgrading hundreds of extra variations of reports. As a result of MicroStrategy s unique report prompts, a few MicroStrategy report developers can meet the dynamic requirements of thousands of business users. End Users Perform Intuitive and Drill Anywhere Analysis across All Data Assets without IT Dependencies End user investigative analysis including the ability to drill anywhere up, down or across hierarchies is available from any starting report in a MicroStrategy application. Any level of MicroStrategy Web user can easily launch into intuitive, out-of-the-box Online Analytical Processing (OLAP) analysis, including right click menus for drilling, insert percent to totals, sorting, pivoting, and formatting. In addition, users access a library of more than 250 basic, OLAP, mathematical, financial and statistical functions that can be used to create business metrics and key performance indicators. MicroStrategy translates users requests into SQL or MDX, which is specifically tuned for the database or data source type. As a result, users are free to perform uninterrupted OLAP analysis on their entire data warehouse and other data assets without IT dependencies. Other BI tools confine drilling and the use of complex analytics to prebuilt cubes. Cubes represent secondary data staging repositories that must be maintained by IT professionals. Many other vendors larger BI implementations dedicate an entire team of trained professionals to building and maintaining proprietary BI cubes. Many other vendors business users have to wait for IT to fulfill their requests before users can proceed with further reporting and analysis. MicroStrategy Business Abstractions Reduce IT Data Warehouse Maintenance Time The data schema within the database cannot always satisfy dynamic business needs, yet constantly updating the data structure requires significant database administrator and BI architect efforts. Business users often need to define their own data groups or clusters of data elements, irrespective of how data is stored in the database. For example, users might want to find the Top 10% of the most profitable customers by different business categories displayed in separate rows on a report. Since this data changes every time new data is loaded into the warehouse, maintaining these new groupings in the database causes significant additional overhead. MicroStrategy Intelligence Server solves this problem with easily created abstraction objects called Custom Groups and Consolidations, which define specific segments without REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 9

10 modification to the underlying data. Complex data queries are automatically generated without end-user coding, ensuring users always get an updated picture of their data. This type of flexibility empowers end users to quickly adjust business grouping without incurring extra data warehousing and performance tuning costs. MicroStrategy abstraction objects save data modeling time and implementation and allow the application to move at the speed of business requirements. MicroStrategy Provides the Highest Number of Reusable Metadata Components, Reducing IT Development Efforts Most competing BI tools focus on developing individual reports as quickly as possible, and in neglecting the reusability of the report components, these tools incur high ownership costs. This method of quick one off report development is not scalable for a large number of reports. For true enterprise-class scalability, the BI architecture should allow each report to be developed faster than the last report. Compared to other BI platforms, MicroStrategy has the broadest range of reusable objects in its metadata repository and results in the most efficient application development. In the MicroStrategy metadata, there is only one definition of any object regardless of how many times it is used in different reports and objects. As a result, there are fewer objects to maintain than in other BI tools. For example, a MicroStrategy Top Stores filter, defined as All stores whose sales exceed the average by 2 standard deviations, can be reused in many other objects including: a top stores grid report, a top stores graph report, a metric, a filter, or a prompt. All MicroStrategy objects from the data abstraction layer all the way to higher level business definitions are reusable across reports, dashboards, and scorecards, speeding development time. MicroStrategy s dashboard visualization widgets and components, such as selectors controlling a line chart, can be also reused across completely different reports. Other BI technologies rely far less on reuse, and far more on each developer s ability to create the same underlying components over and over again for use in individual reports. Not only is manual repetitive development tedious and error prone, it is also slow and expensive for the organization. The result of MicroStrategy s single platform and reusable objects is that for given user requirements, MicroStrategy will require far fewer report developers, regression testers, and less end user training time than other BI platforms and will deliver tremendous cost savings and IT efficiencies. Figure 3: With MicroStrategy s Reusable Metadata, Companies Experience greater Consistency Across Reports MicroStrategy Metadata Other BI Vendors REPORT DESIGN Layout Format Calculations Report- Specific Components MICROSTRATEGY: BEST IN BUSINESS INTELLIGENCE REPORT COMPONENTS BUSINESS ABSTRACTION DATA ABSTRACTION Parameterization Templates Filters Autostyles Metrics Hierarchies Custom Groupings Transformations Attributes Facts Tables Aliases Reusable Metadata Report- Specific Components Reusable Metadata MicroStrategy offers ease-of-deployment, ease-of-use, ease-of-administration, exceptional scalability and powerful analytics that can drill down to the most minute detail. Comcast Cable Communications, Inc. 10

11 Dynamic Dependent Object Updates Reduce IT Maintenance Time Any change to a MicroStrategy object is automatically and instantaneously reflected in every place that references this object without any IT effort. Automatic updates are possible because all MicroStrategy metadata objects are constructed using references rather than copies to other metadata objects. For example, a metric can be used to define a filter and the filter used in a prompt. Any change to the original metric will be automatically reflected in both the filter and the prompt. Change management is simplified as updates to these business definitions and objects propagate bottom-up to higher level objects in the BI application. Other vendors products require IT professionals to update repeated object definitions hundreds of times. When a MicroStrategy report is run, the latest object definitions are used without the need to make any changes to the report itself. These automatic, dynamic object updates reduce repetitive IT maintenance efforts. We have been highly productive using MicroStrategy for several years and found MicroStrategy s single metadata and object reuse has reduced our administrative costs. MicroStrategy is a natural fit for our analytic reporting environment at the enterprise level. AmerisourceBergen MicroStrategy s Open Systems Architecture Reduces IT Customization and Integration Time MicroStrategy is an open systems vendor that embraces any database, portal, operating system, application server, or browser. MicroStrategy integrates via Web services or Software Development Kit with any IT asset across the enterprise. IT departments can integrate report results, functionality, formatting, and user interactivity in any commercial or homegrown IT application. MicroStrategy Web s internal cleanly-layered architecture makes interface and application customizations much simpler. Modifications are isolated to a single layer of the architecture, and are upgradeable, which is normally a labor intensive job with other BI vendors. No coding is required for most customizations. Any desired changes to the way MicroStrategy Web presents reports and BI functionality are stored in external XML configuration files. Simple and upgradeable customizations reduce developer time and effort. MicroStrategy Integrity Manager Automates Data and Application Regression Testing MicroStrategy offers customers a tool to automatically test and document all changes to reports and data; this tool almost eliminates the need for manual quality assurance or regression testing efforts. After a software or hardware change, such as an upgrade, many other BI tools require dedicated teams of people to run all reports and manually compare new and previous versions. These quality assurance teams also check reports for incorrect data due to changes in the data warehouse or in data transformation and loading. This human quality assurance process is labor intensive and error-prone. Organizations with other BI tools spend significant amounts of money testing the integrity of the BI application. Due to limited testing resources and the potential for human error, manual efforts still do not achieve full quality assurance. MicroStrategy Integrity Manager is an automated report comparison tool. Report SQL, data, and graphs are compared to help customers verify data integrity when changes are introduced in the BI ecosystem. MicroStrategy Integrity Manager can be scheduled to run on a time schedule, such as nightly, or after an event, such as a warehouse data load. In automating a repetitive, labor intensive process, MicroStrategy Integrity Manager helps organizations achieve more efficient staffing costs. MicroStrategy s Zero Footprint Web Interface Eliminates Client Installation and Update Costs MicroStrategy Web applications offer business and IT users a true zero-client footprint that eliminates client installation costs. MicroStrategy Web is based on the latest Web 2.0 (Dynamic HTML and AJAX) techniques allowing for an unprecedented level of Windows-like user interactivity through a zero-footprint Web browser. MicroStrategy Web is only installed on the application server or Web server, and is updated to the latest software version within minutes. REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 11

12 Other BI vendors require client installations and subsequent updates, extra work that results in increased staffing costs. MicroStrategy users can access the same reports securely through any web browser or hundred of mobile devices. Many other BI vendors require IT to format reports for viewing on specific devices, requiring IT staff to create and maintain multiple versions of each report. MicroStrategy s Out-of-the-Box Network Security Eliminates Consulting and Maintenance Costs MicroStrategy s architecture is secure out-the-box and requires no expensive third party security plug-ins or consulting fees. Managers require secure network connections to uphold corporate security standards and protected architecture in order to protect the data warehouse from hackers. Web servers are the most common targets for hackers. It is vital that there is no direct access to the data warehouse from the Web server. MicroStrategy s BI architecture avoids this potential security problem by routing all communications with databases or other data sources through Intelligence Server. In this configuration, a hacker who gains access to the Web server does not also gain access to the data sources. MicroStrategy delivers out of the box 128-bit end-to-end network encryption, whereas other vendors require expensive encryption plug-ins. Many corporate firewalls prevent incoming third party plug-ins as a standard security procedure. Unlike other BI products, MicroStrategy s BI platform does not make use of any third party downloads or plug-ins or a specific Web browser to deliver complete BI functionality to business users. With no third party downloads or plug-ins, MicroStrategy Web works seamlessly through all standard Web firewalls, making deployment straightforward and minimizing administration overhead. An architecture protecting connections to the database in addition to adhering to strict Internet safely standards results in reduced IT security overhead. We evaluated numerous vendors and selected MicroStrategy because it provides a full functionality, zero-footprint Web architecture, robust security, integrated platform, UNIX platform support, large-scale reference customers in our space and the best total cost of ownership and ROI numbers. The First American Corporation Downtime Costs: 15% of TCO Downtime represents a significant cost at 15% of the total cost of ownership. Downtime is wasted end user time while the system is not running. Analysts generally calculate the cost of downtime by using annual loaded salary of user time lost during application downtime. Since users may be able to complete other work during downtime, such as making business calls, the annual loaded salary is discounted by a partial-productivity factor. As a result, only some portion of the loaded salary is counted as cost. In this calculation, the amount of downtime is multiplied by a partial discount factor of approximately 10% of the loaded end user salaries, meaning that end users lose approximately 10% efficiency during downtime. MicroStrategy: Best in Business Intelligence Down time is not an option for some organizations core 24 x 7 operations. For example, mission-critical BI operations such as checking for credit card security breaches or analyzing credit scores for near real-time offers cannot afford to be down. Some organizations providing their BI applications as a paid service for their customers will lose revenue during every minute of downtime. TCO measures only labor costs and does not attempt to measure the cost of preventing incorrect data or security breaches, which leads to loss of user confidence or worsened business decisions. MicroStrategy provides industry leading centralized administrator automation capabilities and sophisticated server clustering technology to maximize uptime. Dynamic Resources Allocation Allows User and Data Scalability with Increased Uptime MicroStrategy increases application uptime by using dynamic threads to run semi-simultaneous tasks using the same processing power. These threads allow multiple users and tasks to efficiently share the same resources. MicroStrategy 12

13 Intelligence Server is an automatic multi-threaded application. After the MicroStrategy application server is started, MicroStrategy dynamically reallocates threads from one engine to another as the demand for individual engines varies depending on the nature of user activity and reports executed. This adaptive balancing of internal capacity ensures effective use of available resources, and allows the MicroStrategy BI platform to automatically scale while maintaining performance. Automatic multi-threading imposes less of a load on the server by efficiently sharing resources, ensuring uptime. Organizations can automatically and fully leverage additional MicroStrategy processors to achieve performance scalability. Extra resources are accessed as needed by multiple automatically maintained threads. MicroStrategy s multithreading technology results in efficient and scalable use of application servers and reduces downtime. The MicroStrategy platform is the business intelligence standard across our U.S. operations. Unlike its competitors, the MicroStrategy platform offers the power, flexibility and ease of use that we need 24/7. Yum! Brands; KFC, Pizza Hut and Long John Silvers Taking Advantage of 64-bit Increases Processing Capacity, Decreases Downtime MicroStrategy s 64-bit technology minimizes a significant downtime source when the application server runs out of memory and cannot handle data processing requests. Upgrading from 32-bit technology to 64-bit technology provides a massive capacity increase for a business intelligence system. Increased system capacity results in decreased downtime. Many BI vendors offer to execute on a 64-bit environment, but their applications are still optimized for 32-bit technology. These 32-bit optimized applications cannot take full advantage of the memory capacity provided by the 64-bit environment and instead are limited to 4 gigabytes of addressable memory. A true 64-bit solution can address up to 16 exabytes of memory, and as a result can support many more users, provide better performance through greater cache capacity, and require a reduced number of servers. Increased performance on a reduced number of servers saves money on hardware and power costs. MicroStrategy s 64-bit technology provides increased processing and memory capacity, eliminating downtime costs. Cluster-capable Load Balancing Intelligence Server Maximizes Uptime MicroStrategy s automatic server clustering offers organizations the option to keep their applications running 24 x 7. Each MicroStrategy Intelligence Server in cluster-capable out of the box, and requires no additional third party software. In contrast, many BI vendors require an additional central clustering management service, which introduces extra costs and a potential service failure point. The features of MicroStrategy Intelligence Server include flexible, load balancing, automated failover and fallback, and dynamic asymmetric clustering. Each cluster node is aware of the caches on the other nodes. Load balancing allows for high performance with 100% uptime by dynamically distributing processing workload. The failover process is transparent to the MicroStrategy end users, who will not even realize that a failure occurred. The communication between each node is highly tuned, allowing for maximum information density per communication and decreased network traffic. This centrally controlled architecture minimizes administration and maintenance while providing maximum performance of the business intelligence system. MicroStrategy s automatic clustering and load balancing prevents expensive downtime costs. Training Costs: 8% of TCO Training costs include the time to train IT staff as well as end users. Increased product complexity will lead to greater training time and costs. Some BI vendors have built their architecture largely by acquiring other companies, a growth strategy resulting in a complex patchwork of technologies. These vendors require IT staff to learn different REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 13

14 paradigms for disjointed servers, interfaces, and metadata. Similarly, these vendors offer business users different interfaces for different levels of analysis. MicroStrategy saves training costs by offering developers and users a single, flexible interface, which minimizes training time. MicroStrategy Provides One Single, Customizable Web Interface, Minimizing Training Costs MicroStrategy business users of any skill level only need to become familiar with one interface and analysis paradigm to satisfy their reporting, analysis, and monitoring needs. One single, flexible, and customizable interface holds all functionality options. The MicroStrategy administrator can quickly customize each level of user interface simply by selecting user privilege checkboxes or running a command line script. Providing users with consistent paradigms and standard functionality across styles of business intelligence and applications delivers a familiar interface that cuts training time and increases the likelihood and speed of user adoption. MicroStrategy was selected because of its user-friendliness for diverse types of users, integrated platform, technical capabilities, and attractive total cost of ownership model. World Directories Dynamic Dashboards Eliminate End User Training Costs MicroStrategy dynamic enterprise dashboards offer a one-stop shop for information discovery across multiple data sources and eliminate end user training costs. One dynamic dashboard can provide intuitive impact analysis and data discovery for a group of executives or thousands of customers. Users can securely access dashboards from any inbox or across any Web browser. Business users can instantly click on familiar Web paradigms of tabs, graph choices, column sorting, and filter selectors. MicroStrategy dashboards showcase a unique analytical advantage: connectors between dashboard components provide workflow interaction and updates among all reports, eliminating end user training. One MicroStrategy dashboard can deliver personalized data and dozens of interconnected reports to thousands of users without end user training costs. MicroStrategy Report Services provides an easy-to-use, integrated reporting and analytics platform that provides our end-users greater business insight. We looked at other competing offerings, but preferred MicroStrategy s end-user experience and integrated architecture. AutoTrader.com Hardware Costs: 7% of TCO MicroStrategy: Best in Business Intelligence The BI environment encompasses various hardware costs, including application servers, power related to CPU usage, client machines, and network bandwidth. Client, server, storage and all peripheral hardware typically account for 4 7% of BI ownership costs. 7 The BI environment also leverages a large IT investment the enterprise data warehouse and other data sources. The IT buyer should seek to minimize the BI hardware ownership costs in addition to maximizing the tremendous investment in the enterprise data warehouse. MicroStrategy customers achieve reduced server costs and increased database efficiency through key technical capabilities including automatic multi-tier caching, data warehouse specific, optimized SQL, and MicroStrategy s drill anywhere capabilities. MicroStrategy Intelligent Cubes Eliminate the Need to Maintain a Proprietary Cube Environment and Redundant Hardware and Databases In order to provide BI functionality, many vendors use proprietary cubes, which require additional hardware storage 7 4%: Breakdown of TCO for IT Infrastructure workloads over a five-year period (IDC, 2002, Windows 2000 versus Linux in Enterprise Computing. 7%: IDC, Three Year Server TCO. Based on more than 300 interviews conducted across numerous platforms, presented in composite form. 14

15 and processing power. Proprietary cubes are created on top of relational databases or other data sources and do not leverage any database specific functionality. Instead, in order to create and update cubes, it is necessary to preaggregate the information coming from the data warehouse or other data sources. The creation of cubes is time consuming. Adding additional data to a cube creates a cube size explosion issue and consumes increasing amounts of database resources. Cubes require hardware storage, which is expensive and must be purchased in large amounts. Technologies that rely on cubes generate an enormous added burden to the data warehouse system and require additional hardware resources. MicroStrategy s Intelligent Cube technology lets users manipulate reports on a multi-dimensional cache of data rather than a limited, proprietary cube database. Caches are instantly populated and new Intelligent Cubes are created when users run a report without IT assistance. Intelligent Cubes are automatically built once and stored in MicroStrategy s unified metadata on the centralized server, where they can be shared across the enterprise. MicroStrategy administrators can automatically ensure that business users always have the most current information by configuring the Intelligent Cube data to expire or refresh without any IT effort. MicroStrategy Intelligent Cubes provide users data analysis efficiencies resulting in reduced hardware and server costs. Multi-Level Shared Caching Results in Less Network and Hardware Used and Increased Performance MicroStrategy Intelligence Server automatically maintains query and interface performance while reducing hardware needs by effective caching sharing and reusing data. With other BI products, query performance decreases as the number of users on the system increases. Some BI products attempt to implement caching by simply storing data at a single level of the middle tier, thus missing caching benefits and requiring repeatedly transferring massive amounts of data between layers. The foundation of caching in the MicroStrategy platform is to implement caches at key points within the overall query flow and to tune caching based on user activity. MicroStrategy caching prevents large amounts of data from being transported from the database to the client for every request and therefore consumes less network bandwidth, an additional hardware cost. Usually network bandwidth capacity is very expensive to enhance and generally overlooked. Organizations not benefiting from MicroStrategy s self tuning caching are forced to increase their network capabilities in order to increase the network bandwidth. Customers who do not use advanced caching end up buying additional database licenses and hardware to provide a level of performance that is acceptable to the users. Calculating and transmitting large amount of un-cached data consumes more CPU processing power of the database. More CPU processor power used also results in more electricity consumption, a cost traditionally disregarded but that is becoming more apparent in the recent years. MicroStrategy s efficient caching reduces costs in network bandwidth, hardware storage space, and processing power. Figure 4: MicroStrategy s Caching Delivers High User Scalability Without Sacrificing Performance No Caching Caching Number of Users Average Response Time REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 15

16 MicroStrategy s Database Specific Optimized SQL Delivers Orders of Magnitude in Increased Performance on Any Hardware MicroStrategy s platform delivers database specific queries that result in increased application efficiency. Business needs often dictate that information is retrieved from different data sources. A business intelligence system must be able to communicate with any data source to fulfill these requests. However, data sources have specific connectivity mechanisms, optimization techniques, and result formats. Since each database uses its own optimized Structured Query Language (SQL) syntax, a generic SQL statement performs very differently on varying database platforms. The performance difference can be orders of magnitude depending on the complexity of the query. MicroStrategy Intelligence Server is optimized to extract data from all major data sources. Forrester, a leading analyst research group, highlights MicroStrategy above all other BI vendors for providing all Very Large Database settings necessary for reporting optimization. 8 Optimizing SQL in MicroStrategy requires configuring only a few single data source instances. In contrast, other vendors not leveraging database specific optimization settings will require both more hardware and more IT tuning effort to achieve the same performance. Non database specific queries consume more database processing power and more application server processing power. Some database vendors also sell a BI tool optimized for their specific database. When these customers need to utilize a new data source, they incur the costs of moving data to that specific database platform. MicroStrategy customers save hardware costs with the option to instantly utilize any new data source with automatically optimized SQL. Automatic Drill Anywhere Fully Leverages Database Investments, Reduces Hardware Costs MicroStrategy drill anywhere functionality provides users the option to explore their entire data warehouse without incurring the additional hardware costs required by most BI vendors. With MicroStrategy s drill anywhere functionality, a business user can drill from any report to any data field down to the lowest level of detail within the data warehouse. Unlike other BI tools, MicroStrategy does not require that all drill paths be anticipated and pre-calculated ahead of time for each report. When a MicroStrategy object is added to a report, it is automatically drillable. Drill anywhere provides access to the full breadth and depth of transaction-level data. For example, a user can drill down from a report at the quarter level to month, week or date in a single step. When dealing with large data volumes, it is often impractical or impossible for other vendors cube-based BI tools to provide all users this degree of granular access to data. MicroStrategy s drill down capability is extremely powerful and also unique in the BI market. All possible drill paths do not need to be pre-aggregated in the database or in proprietary cubes. MicroStrategy leverages existing database resources without requiring additional hardware costs, ensuring data scalability. ebay selected MicroStrategy because of its exceptional user scalability and its ability to support advanced reporting and analysis. MicroStrategy also provides excellent query performance with our rapidly growing multi-terabyte data warehouse. ebay MicroStrategy: Best in Business Intelligence Software and Related Vendor Maintenance Costs: 7% of TCO The software and related vendor-supplied maintenance support costs represent 5 10 % of five year BI ownership costs. Software costs include the initial purchase of the software as well as the annual cost of service contracts, which are typically around 18-25% of the software license costs. Though software and maintenance costs represent only a minority stake in costs, many organizations, particularly unseasoned BI buyers, fixate on these license costs, 8 Forrester Research, Inc. Evelson, Boris. Data, Data Everywhere!: Very Large Database Issues And Implications For Business Intelligence July 23, Figure 6: BI Specialist s Advanced Optimization Features Work Best Via Database Integration. 16

17 probably because license costs are most easily quantifiable and the majority of license costs are paid upfront. Though MicroStrategy offers a more efficient architecture that delivers a lower cost of ownership, MicroStrategy license and vendor maintenance costs are competitive with other vendors. As a result, MicroStrategy customers enjoy a much lower TCO than other vendors. A Single Architecture Offers Incremental Growth and Greatest License Leverage MicroStrategy s single architecture lets customers buy just the functionality they need and the option to incrementally grow their BI solution as their requirements naturally expand. MicroStrategy has designed plugand-play components so that each addition brings new functionality to build on pre-existing content so that no rework is required. As a result, a MicroStrategy customer can add the OLAP services module to the engine, and all previously built grid reports automatically become Intelligent Cube reports with wide range of new functionality. In addition, a MicroStrategy customer can add the Report Services Module and be able to reuse all the previously built grid and cube reports and datasets for the new Pixel Perfect document. And finally, a MicroStrategy customer can add the Narrowcast Server module and immediately use any grid reports, Intelligent Cube reports, and document reports as the basis for alerts and proactive notifications. Other vendors, who do not have the advantage of a single architecture built on a unified code base, require customers to spend money on overlapping licenses to increase functionality. Administrators Can Easily Customize the Single User Interface by Enabling Privileges With the option to customize a Web single interface for all functionality, MicroStrategy s customers do not need to purchase multiple, overlapping user licenses. The MicroStrategy Web interface is easily tailored to the needs, role, and skill level of each user or user group. Although MicroStrategy Web offers sophisticated functionality for advanced users, novice users are shielded from any complexity; they get a very simple interface with few toolbars and buttons. As users BI knowledge and needs expand, additional functionality is granted via a user privilege checklist. Since single user objects are re-used across all MicroStrategy products, privilege maintenance is minimal and effective. Other vendors require users to purchase a license for each user interface, so that a single user will require multiple licenses. These multiple licenses are not only more expensive, but customers waste money on overlapping functionality. MicroStrategy provides a single flexible interface so that customers can gain from the most efficient license use. MicroStrategy Provides Customer Driven Enhancement Requests and Seamless Upgrades Included in Maintenance Price MicroStrategy s cost efficient maintenance and upgrade policies deliver significant new functionality, driven by customer and market driven platform enhancement requests, while minimizing software costs. MicroStrategy has a long history of serving the most demanding enterprise needs by delivering scalable analytics serving the largest user bases, the most complex analytic and customization needs, and the most massive data volumes. In general, MicroStrategy has offered customers the option for new enhancement and new product functionality under existing maintenance agreements. For example, MicroStrategy Report Services customers can download new visualization widgets without incurring additional maintenance costs. In contrast to BI competitors, whose complex migrations typically require additional software license upgrade charges, MicroStrategy does not charge any migration transfer tax. MicroStrategy fits the needs of our growing business with its dynamic, cutting-edge features and the scalability to keep our growing user base apprised of business performance. Wilton Industries REDUCING TOTAL COST OF OWNERSHIP: DELIVERING COST EFFECTIVE ENTERPRISE BUSINESS INTELLIGENCE 17

18 IV. Conclusion It is essential for BI buyers to evaluate the Total Cost of Ownership, since today s IT budgets have come under increasing scrutiny and business requirements have become more complex. Business intelligence applications must now be developed, deployed and maintained with the minimum of IT resources, while serving more users across the global organization. Clearly, the BI architecture can be either a liability or an asset to IT departments. A technologically superior architecture will meet a broad range of end user needs while minimizing the amount of IT maintenance and administration. Staffing costs will constitute the large majority of TCO over the next five years. Therefore, IT buyers should evaluate technical capabilities impacting staffing costs. An IDC study, Demonstrating Business Value: Selling to Your C-Level Executives, concludes, Because the single largest factor affecting TCO is staffing cost, IT initiatives that can reduce IT labor costs are likely to find greater acceptance among financial decision makers, and initiatives that enable IT consolidation or automation can significantly reduce TCO across the IT infrastructure. 9 An architecture with duplicative or redundant metadata, user interfaces, administration consoles and servers software inefficiencies will be difficult to manage and more costly to maintain. Although the initial BI application may not be initially forecasted to reach a large size, the right choice of a scalable BI platform upfront can ensure that there are no cost restrictions to future growth. MicroStrategy provides the technical capabilities necessary for cost effective BI. For example, the capability for user self-service, including MicroStrategy s advanced report prompts and surf and save reports, dramatically reduces the need for trained IT report developers. Staffing man hours can be further reduced largely through MicroStrategy s single re-usable metadata, which enables organizations to add new applications at the speed of business. MicroStrategy s leverage of 64-bit technology and out-of-the-box server failover clustering are two methods of keeping the enterprise BI platform running efficiently and 24x7. MicroStrategy s single unified architecture and interface are key methods of reducing user training costs. Hardware costs can be lowered by efficient caching and MicroStrategy Intelligent Cubes. MicroStrategy customers enjoy many options to save on software costs including the ability to add functionality incrementally while leveraging all previous investments. MicroStrategy has built its architecture to scale cost effectively in order to help organizations achieve the goal of pervasive BI better decision making across the enterprise. MicroStrategy: Best in Business Intelligence MicroStrategy is widely recognized for its meticulously engineered software based on a single code base, scaling to applications of all sizes; leveraging any hardware, operating system, and data source infrastructure while making BI more approachable for the average business user. Multi-year customer deployments found that by leveraging MicroStrategy s capabilities, customers were able to add thousands of users, dozens of BI applications, and grow data volumes without requiring significantly more IT full-time employees and hardware resources, therefore achieving an efficient TCO. 9 Perry, Randy. Gillen, Al. IDC. Demonstrating Business Value : Selling to Your C-Level Executives. April

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20 COLL MicroStrategy Incorporated 1861 International Drive McLean, VA