By Kevin Murphy Seagate Software Inc’s plan to distribute a business intelligence package free to millions of potential customers has met with broad cynicism from the BI industry and watchers. Many feel that Seagate may have shot itself in the foot somewhat, and that the biggest benefits will be seen by its competitors. Seagate announced […]
By Kevin Murphy
Seagate Software Inc’s plan to distribute a business intelligence package free to millions of potential customers has met with broad cynicism from the BI industry and watchers. Many feel that Seagate may have shot itself in the foot somewhat, and that the biggest benefits will be seen by its competitors.
Seagate announced Tuesday that it was to send out 2.5 million CDs containing a new reporting tool called Analysis, an amalgamation of its reporting front end, some of its Crystal reports, and a 50-seat license for its Info 7 server back-end, as we reported June 8. Seagate reckons that by removing the cost barrier it can capture a large proportion of the 95% of businesses that do not use BI, and make extra cash off every seat after 50 that companies use. The reasoning goes that a firm already using a free Seagate system is unlikely to bother calling in Cognos Inc, say, to offer an alternative once it decides on a full-blown BI system.
But competitors such as Cognos say that cost is rarely a main deciding factor in selecting a reporting tool. They also observe that doom-mongers pointed to Microsoft Corp’s SQL server 7, with its bundled Plato OLAP functions, as signaling the demise of the BI market. This hasn’t yet happened, and many believe that while awareness of BI has increased, Microsoft’s inability to support Plato adequately has done other vendors more good than harm. Steve Broughton, UK MD of Business Objects, supports this notion, and predicts that Seagate’s strategy will do more to feed his company and other players in the long run.
Cognos marketing manager Peter Weston mirrors this view, saying the main barrier to implementing BI is a lack of strategic understanding or suitable data, rather than cost. He says that when a company decides on BI, it looks to the most suitable and functional tool to its needs, rather than which one comes free. BO’s Broughton also points to basic human instincts, saying a free tool can be devalued in the eyes of those who would otherwise have bought it. That is, the mentality of you get what you pay for. This is a view echoed by Brio Technology Inc and Cognos.
Seagate says it has the largest number of licensed users in the market, five times as many as nearest rival Business Objects’ one million, although this may be in part due to its strategy of having its Crystal reports software bundled with other packages through a series of OEM deals. But the firm certainly does not generate as much revenue as its competitors, and this is why it hopes this near-repeat of the Crystal strategy will actually touch its revenues as well as its market share. Seagate’s notion is that, with the exponential growth of BI predicted by pundits such as International Data Corp, bigger market share equals greater revenues. But if you give the software away for free…