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7/1/2009
08:47 AM
Doug Henschen
Doug Henschen
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Mulling the Mystery of Microsoft's BI Market Share

When IDC recently released its BI revenue and market share figures for 2008, I wondered just how the research firm compiles those figures. It turns out the bulk of the data is reported to IDC directly by the vendors... But what do you do in the case of Microsoft, which bundles all the components of Microsoft BI as features of multipurpose products?

How do you gauge Microsoft's business intelligence market share when it gives BI functionality away for free? That was a bit of a puzzle even before Microsoft's January announcement that it would end development of the PerformancePoint Server, the one and only entirely BI-focused product the company had. As part of that move, Microsoft now bundles what it calls "PerformancePoint Services" -- dashboarding, scorecarding and analytic capabilities -- into the enterprise edition of SharePoint. That's bundled as in free, just as Reporting Services and Analysis Services have long been bundled with Microsoft SQL Server. Microsoft's BI front end is Excel, the general-purpose spreadsheet tool that's part of the Office suite -- seldom purchased separately or used exclusively for BI.

So now if you own Microsoft SQL Server, SharePoint (Enterprise) and Office, you already own Microsoft BI, and these days, Microsoft executives take every opportunity to point that out. In an interview earlier this month, Kristina Kerr, group product manager of Microsoft BI told me, "the move we made in January has definitely spurred on a lot of growth and a lot of interest in BI among SharePoint Enterprise customers. These are tough economic times, so a lot of customers are looking internally to see what they already own and see how they can make the most of it."When IDC recently released its BI revenue and market share figures for 2008, I wondered just how the research firm compiles those figures. It turns out the bulk of the data is reported to IDC directly by the vendors. Most BI vendors are public companies, so they are in the habit of reporting revenue. What's more, BI products and related sales are usually distinct and easily traceable. But what do you do in the case of Microsoft, which bundles all the components of Microsoft BI as features of multipurpose products?

"It's a modeled number based on the use of Analysis Services, Reporting Services, ProClarity or PerformancePoint," explains IDC Analyst Dan Vesset, who co-authored the BI market share report. "What we have not counted is Excel," which is so widely sold and used it doesn't make sense to count as a BI product sale.

Now that ProClarity (the performance management product Microsoft acquired in 2006) and PerformancePoint (its now-abandoned successor) are on end-of-life status, this year's market share report noted that "going forward, IDC may be reevaluating its methodology for allocating BI software revenue to Microsoft."

IDC does do end-user surveys to validate market share data from private vendors, Vesset says, and it also follows that practice to verify Microsoft's inherently fuzzy figures. Vesset says IDC has yet to decide on a new modeling approach for Microsoft given the recent changes in its BI "product" lineup. "If people are buying SharePoint because they get a BI front end out of it, then we should allocate that, but we know that's not the only reason they are buying the product."

As Cindi Howson points out in this post, vendors tend to twist IDC's seemingly black-and-white figures any number of ways by zeroing in on the subcategories of "query, analysis and reporting" and "advanced analytics," but there's another layer of mystery when it comes to Microsoft. Namely, Microsoft's revenue per BI customer is pretty much unknowable because there are so many other reasons organizations buy SharePoint, SQL Server and Office. In fact, there are likely plenty of customers that use all three products, plus one or more of the bundled, BI-oriented services, that still might identify their enterprise as a "BusinessObjects Shop" or a "MicroStrategy Shop."

When is a Microsoft shop not a Microsoft BI shop? That same question also comes up when the topic is content management or search, and it's often a hard question to answer. I guess the best IDC can do is focus on revenue, come up with a new modeling formula and stick to it for consistency's sake.When IDC recently released its BI revenue and market share figures for 2008, I wondered just how the research firm compiles those figures. It turns out the bulk of the data is reported to IDC directly by the vendors... But what do you do in the case of Microsoft, which bundles all the components of Microsoft BI as features of multipurpose products?

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