To get a mental grasp on this, take for example one of Microstrategy's customers: Netflix (NFLX). Hypothetically, lets say Netflix has decided to push their movie rental service into a few new markets, say, cities A and B. First the company allocates marketing dollars to promoting the service on television, in newspapers, and so forth in these markets. Those marketing investments are all recorded in a corporate database. As customers begin to sign up for the free trials, Netflix records their addresses in a similar customers database. Eventually some of these trial subscribers will decide that they love the service, and begin becoming paying members. As this process takes place, Netflix marketing managers can see in real time that the marketing dollars spent in city A are resulting in a larger return on investment then those in city B, and decide to pour more money into marketing there. At the same time, the COO sees that city A is beginning to build a large enough subscriber base to consider opening a distribution center there. Business intelligence software makes this efficient use of capital possible. Without it, Netflix may have wasted tens of thousands of dollars in city B before enough evidence piled up that it was a poor geography for investment.

The business intelligence software market is an attractive one. The immediate visualization of company performance and associated efficiency improvements have led to strong demand for it. Gartner estimates the market growing 9% a year through 2011. Additionally, the infrastructure for BI software requires difficult and painstaking installation, leading to high switching costs, recurring maintenance fees, and a fair amount of pricing strength for those maintenance contracts.