By: Helena Schwenk, Principal Analyst, MWD Advisors
Published: 10th July 2014
This work is licensed under a Creative Commons License
This week in Barcelona Microstrategy held its European user convention where around 1,200 delegates congregated to hear the company, partners and customers showcase the latest from the BI vendor. Whilst there was a lot to take in at the event it was the company’s announcement about a new packaging scheme designed to simplify pricing for customers that got the most air time.
The details of the announcement can be found here, but in essence these changes mean the company has now distilled 21 different products into four separate packages:
In addition to this the company has also announced it’s extending free upgrades to existing clients enabling them to access premium capabilities included in the new product packaging at no additional charge—an incentive for some of its customer base to drive further value out of their software investments.
These moves can only be good news for the market. How vendors price their premium BI suites is often seen as a ‘dark art’ by many end user organisations. Bringing some transparency to the pricing process is long overdue, especially at a time when disruptive technologies and models around cloud computing, freemium offerings and the consumerisation of IT are opening up more and more licensing and pricing options for organisations.
Clearing up some of this confusion will certainly help. That said, Microstrategy isn’t the only vendor trying to be more open about its pricing policies. In 2012, Qlik announced a very similar initiative designed to take some of the mystery out of purchasing its software and its success has most likely prompted Microstrategy’s move.
The new packaging scheme also comes at a time when the company is attempting to extend the relationship it has with customers beyond the IT department to a LOB audience. With the allocation of IT budgets moving to many more business departments, this simplified packaging scheme will also make it much easier for non-IT people to plan and budget for their software purchases. The bottom line here is that Microstrategy wants to make it far easier for its customers to do business with them and this will certainly help.
However, getting closer to business users will require more than just a clearer and simpler pricing model. For a company that has traditionally sold into IT shops it will also need to facilitate more business-focused conversations and this could also involve re-orientating its sales force. Being able to speak the language of the business and have a more business-focused outcome rather than technology focused dialogue in particular are key requirements here.
There are signs that Microstrategy doesn’t want to stop at just its simplified packaging policy; it is also intent on using this momentum to build awareness and a bigger profile about the company. The company has just appointed a new CMO, Marcus Starke (ex SAP), who has been brought on board to bring more strategic weight to the company’s marketing operations. Interestingly, as part of this initiative the company has now spoken to Wall Street analysts for the first time in around ten years. For a company that has often felt in the shadow of its larger competitors this represents a positive move. In fact, Starke has been bold enough to say he believes the company could be two or three time its size (it generated $576 million in revenue during 2013, and $83 million in profits)—although how the company might achieve such as feat was perhaps less clear.
Nonetheless it’s fair to say that Microstrategy has a somewhat unique position in the market. It isn’t one of the large conglomerates (such as SAP, Oracle or IBM) but it’s been in business for nearly 25 years, so it isn’t a small start up either. Instead it’s one of the few vendors that can squarely occupy the middle ground as an independent pure play. It is also one of the few BI vendors that has evolved its BI platform and tools through organic development rather than using the acquisition route.
Furthermore, because it doesn’t have a data management capability and it doesn’t own any part of the business application layer (whether it’s CRM or ERP for example) it can maintain a position as the ‘Switzerland of BI vendors’; a position that is most likely to appeal to any organisation looking for a best of breed offering and who doesn’t want to put all their BI eggs in one basket. Continuing to build and promote its partner ecosystem with database, data integration, application and Big Data vendors to help round out its capabilities in other areas should therefore remain a priority for the company.
All in all we believe Microstrategy has a lot of strengths to play to. It has a history and expertise in building robust BI and reporting tools. It was also one of the early vendors to carve out a niche around Mobile BI (which we wrote about here) and it also has a growing Microstrategy Cloud presence delivered through the company and partners such as Amazon. But equally it has work to do as well; the company doesn’t have a particularly well known story around Big Data, for instance, nor has it managed to carve out a strong position in the advanced analytics space, despite having a comprehensive offering. These are all things that will take time and investment, but if Microstrategy get it right the results could be powerful.
All fields must be completed to submit a comment. Email addresses are passed through to the author so they can contact you directly if needed.
Published by: electronicdawn Ltd.