Gartner Group Notes Significant DW Expansion for Large Firms 10.14.97 ACTION ITEMS D S *
VAR Business has reported that Gartner Group Inc., Stamford, Conn., estimates that more than 80 percent of the world's largest companies either will have or will be planning a data warehouse by the end of the year. Some of those companies are constructing enterprisewide, multiterabyte data collections, while others are building smaller scale data marts to meet the needs of individual departments. Almost all will be using the services and expertise of resellers to help them.
There are several reasons for the rapid growth and popularity of data warehouses: the need for comprehensive information, compensation for the lack of an enterprisewide data architecture and a high return on investment (ROI) are a few. But conventional data warehouse projects are not without pitfalls. Traditional warehouses have been extremely expensive to build. Meta Group, Stamford, Conn., estimates the cost of a single data warehouse implementation project at more than $3 million. They can also take a long time to build. To make matters worse, not all data warehouses deliver as promised. Gartner Group reports that as many as 60 percent of firms fail to meet their original objectives with data warehouses. Even with the relatively sure ROI, traditional thinking holds that the average payback period for data warehouses exceeds two years.
Such drawbacks have kept smaller companies and numerous resellers out of the market. They have also spurred on a new type of data warehousing, called virtual data warehousing, that might draw the wary into the fold. With the advent of new technology, particularly the growth of the Web, the conventional method of storing data in a single large installation is being replaced with pointers and links to information all over the world.
One vendor actively pursuing reseller partners in this virtual warehouse space is enterWorks.com, which believes that traditional warehousing projects don't make sense for huge numbers of customers and, therefore, for the VARs that sell to them. "If you have more than a couple of data sources, it doesn't do you any good to bring that data into what we refer to as a 'corporate information silo' with everything in a collective repository," says Mike May, vice president of marketing at enterWorks.com. "It does not do you any more good to have it in one location than in 20 or 30."
With a virtual warehouse, just the pointers are stored in a central location and the data lie in their original location. This new idea solves many of the traditional data storage problems. Instead of viewing only historical information, virtual warehousing allows customers to view both historical and current data running in real time. According to the vendors in this space, this enables customers to get a complete integrated view of the enterprise as it has existed and currently exists, not just a snapshot of trends by viewing legacy information.
The virtual warehouse also tends to be more user-friendly. Instead of just analysts, strategists and high-level managers having the technical expertise to access the information, now anyone with access to a Web browser can find data. This lets VARs show a bigger value proposition.
Another advantage to a virtual warehouse is its small size. Conventional warehouses can often be in the multiterabyte range, while a virtual database stores only cached data and pointers. Reduction in size can also mean reduced costs. Start-up projects that might have previously cost in the multimillion dollar range can now be done for as little as $50,000. enterWorks.com also claims its clients have reported dramatically shorter ROI results.
Virtual DB, enterWorks.com's product, has a long way to go before it can even compete in the same markets as warehousing giants such as Oracle Corp., Informix Software Inc. and Red Brick Systems Inc. Warren Jones, a spokesman for enterWorks.com, says that the technology will allow the vendor to carve out a very secure niche for itself, and for its partners.
Jones stresses that by using Virtual DB, data sources can be combined, transformed and displayed in real time without moving or replicating the data, and without making any changes at the source of the data.
"It's interesting to see how our solution delivers benefits in different approaches," says Jones. "There's Data warehousing, where we can speed up implementation, then 'drip feed' warehouses or data marts with cleansed, integrated data; data migration, where we can move data quickly and cost effectively to SAP, Baan, PeopleSoft and other applications where the data can be viewed and manipulated; and data access middleware, the largest segment of the middleware market, where our strength is 'playing the data where it lies.' "
Some enterWorks.com customers, such as American Express Co., MCI Communications Corp. and GTE have used Virtual DB to combine those approaches. Currently, the company is focusing on the following four vertical markets and needs resellers to help in each one:
Even with the promise of lower investments and a dramatically quicker ROI, customers may be reluctant to go with a new idea if there's a difficult learning curve that could potentially hurt their bottom lines. "Customers want new views and new logic, but they don't want to change their environment, " May says. "Many customers have traditional relational databases and mainframes. They can't change these things overnight, and they want a tool that lets them conduct business in their environment, but conduct it differently by taking advantage of new technology."
In other words, customers want to take advantage of the benefits a virtual data warehouse offers, but don't want the pains often associated with learning a new tool. enterWorks.com hopes to solve this problem by implementing an easy-to- use front end. Although Virtual DB offers many different front ends (HTML, Java, C++) to the virtual warehouse, the most important option may be the browser. It doesn't take a network administrator to access one, and it makes the data available to anyone having access.
Because this technology is not well-known by most Fortune 1000 companies, and since many of those companies have a lot of money tied up in existing warehousing projects, VARs choosing to work with enterWorks.com or its virtual warehousing competitors may encounter many naysayers.
May sums up two challenges to enterWorks.com and the future of virtual data warehousing: "It's an awfully big solution to an even bigger problem. Companies, typically Fortune 1000 firms, have been burned in the past by trying to implement solutions that haven't worked, so there's some concept-proving needed," he says.
"Also, with the size of some of the customers we sell to, a lot of them try to take on these problems themselves, even though not everyone has those kinds of resources."
That means for resellers willing to buck the trend and go with a simpler solution, there may be great growth opportunities. Analysts, such as Gartner Group, aren't convinced that conventional warehouses are worth the effort for midtier companies. Until larger players such as Oracle attempt to offer a new way for VARs to approach these customers, the virtual warehouse may be the way to attack this market.
Contacts:
enterWorks.com Ashburn, Va. (800) 505-5144, http://www.enterworks.com
International Software Group Inc. Burlington, Mass. (617) 221-1450, http://www.isg.co.il
Open Universal Software Montreal, Quebec (514) 344-6040, http://www.universal.com