Microsoft has announced its intention to move the scorecard, dashboard and analytic functionality from PerformancePoint Server 2007 into its Microsoft Office SharePoint Server Enterprise, while dropping the planning module. While integrating business intelligence into the core stack fits Microsoft’s wider strategy, PerformancePoint Server may have been a successful standalone product, given time.
In an update to its business intelligence (BI) strategy in late January 2009, Microsoft announced its intention to phase out standalone PerformancePoint Server 2007 (PPS7). The company plans to release its last service pack for PPS7 by mid 2009, after which it will no longer invest in stand-alone versions of the software. The solution, launched late in 2006, is being discontinued within two years of its launch in order to improve assimilation of BI into the company’s core stack. Microsoft believes that the change will help it to offer lower price points on an integrated search, collaboration and communication platform. However, this dilutes the company’s stand in the enterprise BI market and hinders its ability to compete with the likes of IBM, Oracle, and SAS. But Microsoft is not necessarily aiming to compete with these vendors on standalone enterprise BI, and Datamonitor believes that the software giant is instead focusing on its strengths and picking its battles wisely.
Following Datamonitor’s H2 2008 technology assessment, it became apparent that PPS7 lacks a few key functional areas and scores low on some criteria, such as the availability of packaged applications, vertical solutions, and platform support and deployment. However, PPS7 is a relatively new entrant in the performance management market, having been developed partly in-house and partly through the 2006 acquisition of Proclarity.
Indeed, PPS7 has impressed over its short life on the market. It boasts of healthy adoption driven by large and small customers alike, including Chevron, Lilly, TAC Americas, Maricopa County, Pilot Travel Centers, Energizer and Skanska. Microsoft quotes year-over-year growth at 188% on a conditional access license basis, and customer numbers in the thousands. Arguably, had it backed the solution for another couple of years, Microsoft could have driven greater adoption and established the brand.
Furthermore, there was ample reason to believe that the PPS7 could have plugged the technology gaps given time. PPS7 could have tied into the MS Office interface for effective cross-sales and the protection of Microsoft’s star performer product line. It could also have been the biggest beneficiary of the trend to replace Excel spreadsheets as a planning tool with a performance management application.
The shift from PPS7 to Microsoft Office SharePoint Server (MOSS) is significant. Operationally, the company plans to consolidate the scorecard, dashboard, and analytic capabilities of PPS7 into MOSS, a suite of tools for content management and collaboration. It is in the analytics that MOSS will most likely gain from PPS7 and Proclarity legacy, as these include data grids, visual drilldown of multidimensional data, and root-cause analysis. This will make MOSS, through MS Office Excel 2007 Services, the official face of Microsoft BI. After April 1, 2009, PPS7 will no longer be a standalone item on the Microsoft price list and will only be obtainable by purchasing MOSS 2007 Enterprise CAL with Software Assurance.
Only time will tell the success of this reshuffle. What is almost certain is that Microsoft’s investment in PPS7 over the last two years and its efforts to build a brand around it are wasted. The untimely retirement of PPS7 Planning, coupled with the radical change in strategy, could likely hamper reseller and IT buyer confidence. Although Microsoft is yet to reveal the details of its plan, it is widely believed that planning and financial performance management will be reassigned to Microsoft Dynamics, and the existing Microsoft FRX and Microsoft Forecaster products. Datamonitor contends that this direction could have been taken back in 2006, saving a non-trivial amount of resources even by Microsoft’s standard, and causing minimal channel and customer dissatisfaction. Admirably, PPS7 managed to build a considerable ecosystem of partners, resellers, consultants, developers and certified professionals. These stakeholders could now bear the brunt of the decision to drop PPS7.
On the positive side, BI capabilities delivered through the ubiquitous MOSS are certainly closer to Microsoft’s stated strategy for the BI market in particular and information management in general. Microsoft was late to enter the BI market in 2006 and therefore focused on spreading basic BI capabilities wide, rather than competing on deep functional expertise. The company may be better off pursuing a product which fits effortlessly into the overall stack and provides entry-level BI capabilities, rather than a separate BI product.
While MOSS will not compete with the incumbent enterprise performance management vendors, Microsoft’s new offering will be a compelling proposition in the BI mid-market, catering for organizations with 50 to 500 employees. MOSS will also complement Microsoft’s SQL Server as a BI application development platform and protect Microsoft’s star performer product line, MS Office. However, it remains to be seen how BI will compete for development and marketing resources internally within the MOSS portfolio, and whether it influences purchase decisions in MOSS’s favor. Microsoft continues to communicate a message of ubiquitous BI to customers. However, the entire value proposition changes from here on in.