Microsoft Plans to Expand BI to Performance Management - Page 2

At the same time, Microsoft is focusing development inward.

The company built new BI and performance management capabilities into the upcoming SQL Server 2005 and Office 2007, and based a good deal of PerformancePoint functionality on its ProClarity acquisition, which closed in April.

And Microsoft has unified its sales and marketing and go-to-market activities around PerformancePoint, according to Raikes.

But despite the investment—even from a company with the deep pockets the likes of Microsoft—challenges exist in cracking an already deeply penetrated market, analysts say.

"From one angle, everyone uses Microsoft tools anyway and everyone wants to use Excel, so theyre positioned well there," said John Hagerty, vice president of AMR Research, in Boston.

"But they have to gain credibility with business users. [PerformancePoint] looks to be a yearlong beta test, and Microsoft will possibly gain credibility there. But they need to show they have the philosophy part [of performance management] down, and the IT tools to implement it."

Part of the challenge of gaining credibility with business users is the fact that Microsofts stack is sold heavily to IT users, and not business users.

Which is why a separate BI/performance management development platform makes sense, according to Forresters Gile: Its not typically IT people who model business performance processes—the way metrics are measured—rather, its the business (primarily finance) users.

To this end Microsoft has taken the step of adding a modeling capability to PerformancePoint.

"This is one of those issues BI vendors have missed," said Gile.

"Performance management is really about processes to perform a job, be that operational, strategic or tactical. Its going to be a big part of performance management."

That said, Microsoft is not the first to coin the concept.

In April, Cognos announced that it would embed Lombardi Softwares BPM (business process management) engine into future versions of its namesake Workforce Performance applications.

Microsoft is also not the first to expand BI, which looks at metrics based on events that have already occurred, into the realm of performance management.

Many of Microsofts BI partners—SAS Institute, for example—build capabilities using Microsoft technology to do just that.

The SaS Enterprise BI Server provides integration to Microsoft Office and, at the same time, maintains "one version of the truth" with a companys data—a key concept that Microsoft is outlining with PerformancePoint.

"Performance management is something weve been doing for many, many years," said Christina McKeon, business intelligence product manager at SaS, in Cary, N.C.

"Its a question of timing: Microsoft has traditionally been late delivering to the market. The question is, will they get all those plans on the market in time before the market changes and heads in a different direction?"

McKeon said one area SaS sees as emerging is an emphasis on predictive analytics that answer questions like why, how much, where, whats next and whats the best thing that can happen?

Microsofts goal to become a performance management player isnt achieved with the announcement of PerformancePoint, or in its delivery in 2007, according to analysts. It merely sets the stage for what the company wants to do.

"This will be a progression; what theyve announced wont be complete. There is not analytics, not CPM [corporate performance management].

"But it does extend BI to a logical place," said Lee Geishecker, research director at Gartner, in Stamford, Conn. "This changes the landscape but doesnt change the game."


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