Peak Performance: Can Microsoft Make BI Stand Still?
Microsoft's announcement of PerformancePoint Server 2007 could signal major changes to the business intelligence landscape. But the Redmond giant has many challenges and realizations to face if it wants to gain a solid grasp in the BI market.
On June 6, the Redmond gorilla shook the world of BI and business applications with its plans for Microsoft Office PerformancePoint Server 2007. Are the tremors harbingers of a new BI landscape or just inconsequential aftershocks?
The reverberations from Microsoft's moves are a big wake-up call for the other major players--Oracle and SAP in particular. If they do not respond, they may be left behind. Microsoft's approach is to offer scorecards, planning, analytics and reporting based on a common platform. Oracle and SAP are still working on how they can build or combine existing products that comprise a full performance management suite. They are unlikely to have complete product sets ready by mid-2007, when Microsoft is supposed to release PerformancePoint and related tools. Score one for Microsoft.
What about the BI players? Business Objects, with revenues greater than $1 billion, should have the biggest worries. It acquired Crystal Decisions in 2004 not only to improve its BI reporting but to extend its reach to the desktop, where Crystal had a strong embedded presence. But now, organizations used to having Microsoft provide their business productivity tools could view upgrades to basic reporting and dashboards as simply adding to their existing Office deployments.
Hyperion also has a substantial presence in the BI and financial-management tools markets. Rather than put its resources into building its own scorecards or developing a fully integrated BI suite on its own common platform, Hyperion has been focused on developing applications, BI tools and data-integration products that work closely with Microsoft Office. And Cognos? The Ottawa-based supplier pulls in a substantial share of its revenue from its BI platform, even as it has diversified over the past couple of years into applications for finance and operations.
Thus, the entire BI and business applications sector is closely watching customer reaction to Microsoft's announcements. With the most broadly deployed and used desktop productivity applications and de facto industry standard file formats, Microsoft can allow itself a little bravura as it expands further into the BI realm. The overall objective is to convince large organizations to buy into its road map. The immediate goal, of course, is to get companies to wait for Redmond rather than pursue short- and long-term product procurement plans with other vendors.
Beyond the usual hardware and other infrastructure issues raised by migration to something as significant as a new version of Office, what should you consider as you set your BI and performance-management strategy? From what we can tell so far, PerformancePoint looks promising. First and foremost, Microsoft is finally addressing the standalone spreadsheet problem, which has become a data governance and compliance nightmare. In most organizations, spreadsheet data goes unaudited and is easily modified.
Second, pay attention to whether Microsoft understands how to be a direct seller to the enterprise. Historically leaving the selling and servicing of larger enterprises to its partner ecosystem, Microsoft has comparatively little direct experience with building the knowledge and interaction required for longer customer relationship cycles. The company has been filling in the gaps by hiring industry veterans for its marketing and sales organizations, hoping that new personnel can deliver wiser personal attention to BI and performance management deployments.
Still, it's tough to change the face of an organization overnight. If it sticks to its traditional three- to five-year product release cycles, Microsoft may struggle to deliver the level of responsiveness needed when customers demand quicker enhancements to stay ahead of their own competitive market pressures. Plus, organizations today are generally looking for evolutionary, not revolutionary, changes to their software--not to mention the internal systems and technologies that support BI and performance management.
However, I'm sure readers who've been on the receiving end can attest that Microsoft's marketing focus on business executives is far more serious than in the past. Time will tell if the folks in Redmond have invested as aggressively in developing an organization that can satisfy and support your BI and performance management requirements. Microsoft would like you to freeze your procurement and wait. But ultimately, it's not about their software: It's about your business.
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