Living in Interesting Times

“It was a glittering time. They confidently swept into office, ready, moving, generating their style, their confidence – they were going to get America moving again. There was a sense that these were brilliant men, men of force, not cruel, not harsh, but men who acted rather than waited. There was no time to wait, history did not permit that luxury; if we waited that would all be past us… Things were going to get be done and it was going to be great fun; challenges awaited and these men did not doubt their capacity to answer these challenges… History summoned them, it summoned us: there was little time to lose.”

Halberstam’s breathy description of the DC gestalt ca. JFK’s inauguration is curiously (and scarily) applicable to today’s America. Ascribing the opposition’s intransigence to mere habit, the Administration is charging ahead to evaluate, diagnose and fix the problems bedeviling our world. This attitude bodes well for researchers of all stripes. A recent email from a major university administrator contained the following phrase - “the campus expects a brief open window of riches”. Things are going to be done and it is going to be great fun!

In this climate of transparent, analytically-driven, decision-making from top to bottom, how does the profession measure up? On the one hand, Operations Research academics are doing what they can to capture the riches soon to rain down from Mt. Washington. However, it’s really interesting on the commercial side of the fence. Especially among vendors, much activity is afoot:

• I mentioned Gurobi’s surprisingly mature LP/MIP solver here. The start-up has taken a tack of ubiquity – making the product available in as many optimization environments as possible. In addition to Excel-compatibility through Frontline’s Solver framework (see Frontline CEO Dan Fylstra’s comment), the optimizer is available in conjunction with three leading algebraic modeling languages, AIMMS, GAMS and MPL. I understand that a wrapper for AMPL is also in process.
• Interestingly, Gurobi is undercutting the price floor maintained by the previously comfortable duopoly of the two benchmark solvers: CPLEX and XPRESS. Instead of $15,000 or more per seat, Gurobi is asking approximately half the amount. While the impact of per-seat license fees in the adoption of optimization technologies is routinely exaggerated, cutting the price in half will definitely perturb the status quo. (And cause not a little consternation in Ilog’s – IBM’s, if you will - executive suite, which has come to depend on CPLEX’s profitability. I suspect that Fair Isaac will be less impacted, since its optimization-based direct revenues represent a much smaller part of its profitability.) Gurobi has not yet shared its deployment pricing model. That will determine its uptake in the significant optimization ISV market.
• In August 2008, Microsoft soft-launched a .NET-oriented optimization framework called Microsoft Solver Foundation (MSF). In addition to a rich .NET API, MSF can also be used as an Excel add-in. (Surprisingly, it does not particularly share the elegance of integration with Excel evident in Frontline’s products.) MSF 1.1, introduced today, even includes Gurobi’s MIP solver (was it code-named Zelig?!) as the default. This very smart choice should make it a powerful solver alternative, especially in small shops, which should be able to use it free for internal use. Longer-term, MSF’s integrative framework designed to incorporate third-party optimizers, backed by the sales heft of Microsoft, could make it a product to be reckoned with.
• SAS Institute, a major player in the Analytics space, has sharpened its focus in the optimization space in recent years. As a privately-held company, its actions are often opaque. SAS’ OR group has recently been in an aggressive hiring mode, though I remain more impressed by the effort than any (known) star hires. Further, its marketing seems to be targeted at its existing customer base. Admittedly, the base is large and lucrative. But it’s difficult to visualize such a narrowly-focused effort expanding its mindshare in the broader market.
• IBM’s acquisition of Ilog and Fair Isaac’s acquisition of Dash Optimization have been written about here and elsewhere. FI is using Dash’s XPRESS engine to extend its largely financial services-based business. Unless the company has a more expansive strategy up its sleeve, that seems like fairly limited leverage. IBM, on the other hand, is selling a fairly pervasive strategy for Ilog’s Optimization and Rules products. Even after filtering out the more egregious spin, the combination of IBM’s consulting reach and its sales prowess cannot but have a multiplicative impact on Ilog’s core strength: technology.

All in all, 2009-2010 promises to be the mother of all “interesting times” for Analytics.

This entry was posted on 13 February 2009 at 23:37 and is filed under Operations Research, Vision. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.