Microsoft's Big Change on Performance Management (and BI)

What's the quickest way to grow your market share in an economic down turn? Change your licensing policy! That's exactly what Microsoft has done with its dashboard and scorecard capabilities that were initially part of PerformancePoint Server. PerformancePoint was released with much fanfare in 2007 as having integrated planning (the big innovation), scorecarding (an enhanced version), and dashboarding (acquired from ProClarity). It turns out many customers only wanted the latter two components, which are more BI related. So now Microsoft is making it easier for customers to get these by including them in the SharePoint Enterprise license. Effective today, SharePoint enterprise customers can download PerformancePoint for free. Conversely, customers who bought PerformancePoint with software assurance can download SharePoint for free. What's more, Microsoft added the following:In the summer of 2009, we will release "Service Pack 3" for PerformancePoint Server 2007, which will include updates to the Planning module. From there we will focus our development on the new monitoring and analytic capabilities in "PerformancePoint Services for SharePoint" and will not offer standalone versions of PerformancePoint Server.

Microsoft says this is part of their strategy to have BI break that glass ceiling of 25% BI adoption and help make BI available to the masses. This is certainly good news for customers looking to add capabilities while saving on licensing costs. However, the various BI components (scorecard, dashboard, OLAP, reporting) products are not well integrated either from a technical perspective or from an end-user experience (yet). Cost of ownership goes well beyond licensing costs. But indeed licensing is the most notable out-of-pocket expense, and Microsoft's approach to seeding the market has clearly been a successful strategy. In today's economy, it's a great move by Microsoft.

I also find this move interesting because it flies in the face of those who have long touted the convergence of BI and performance management (as in financial planning and consolidation). Certain analyst firms - particularly Gartner - seemed to push for it and much of the industry consolidation of last year was in part due to that strategy. (To the point of Doug Henschen's blog post earlier this week, maybe that's why Microsoft has now been moved down on the vision axis?)

In working with customers on selections, I have seen some convergence but not as much as I would have expected amid the buzz or the controversy, see here and here. While convergence is a good vision, in reality, few of the product lines that span performance management and BI are that well integrated (yet). The tasks associated with each application are different, and it seems neither user segment is willing to sacrifice functionality for integration or one-stop-shopping.

There is of course the alternative view to this move: that Microsoft simply got into the performance management game too late and is simply conceding the market to competitors, vendors who have been there longer and have stronger relationships with the office of finance. Microsoft says it will pursue the performance market as a company but via its Dynamics business unit, not the BI business unit.

I would say there's a degree of truth in both views.

Regards, Cindi HowsonWhat's the quickest way to grow your market share in an economic down turn? Change your licensing policy! That's exactly what Microsoft has done with the dashboard and scorecard capabilities that were initially part of PerformancePoint Server. Effective today, Microsoft is now making it easier for customers to get these by including them in the SharePoint Enterprise license.