Theres nothing cheap about the BI capabilities of Office 12 when you have to upgrade all your desktops and many servers to get there, competing BI vendors say.
“Today, BI is too expensive, too hard to use and too inconvenient,” proclaimed Jeff Raikes, president of Microsofts Business Division, when the company on Monday talked up the business intelligence muscle its putting into its upcoming Office 12 platform. “We think everyone deserves BI. Theyre just not able to get there today.”
BI vendors are eager to pop that bubble. Following Microsofts news of bargain-basement BI and the first-ever centralized server control of the insanely popular Excel spreadsheet, BI competitor Cognos was quick to point out that theres nothing cheap about Microsoft BI.
“To get the full BI value, you need to do two things: upgrade all your desktops to Office 12, and then youve got to swap out most, if not all, of your server-side infrastructure and put in Microsoft instead of what youve got now, between IBM and SAP and Sun and Oracle,” said Neal Hill, senior vice president of corporate development at Cognos.
“To get the full value from the thing, its not just I add this server plus those full seats,” He said. “You have to swap out your current infrastructure for Microsoft. There arent that many billion-plus organizations willing to do that for any vendor, much less for Microsoft.”
Its easy to see why BI vendors are protesting so loudly. Excel is by far the most widely used BI tool. All major BI vendors have some type of Excel add-ins—they have to, since office workers are virtually addicted to it.
But up until Office 12, those Excel spreadsheets have been disconnected, stand-alone files. They havent been linked to the server or back-end databases. As such, if a user were to create a huge, mission-critical Excel file and then to leave a company, critical knowledge walks out the door with him.
Microsoft is set to change all that in Office 12 with new server-side Excel capabilities called Excel Services. With Excel Services, Excel will be able to be used as a BI interface sitting on top of SQL Server.
Control of the spreadsheet for the first time will be centralized so that enterprises can secure, share and manage spreadsheets on the server.
Spreadsheets can be viewed via Web browser or downloaded to desktops, but the enterprise will retain the ability to control who sees what data, vastly aiding in regulatory compliance issues that pertain to controlling who sees what.
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“At the end of the day, the issue has been that there is everyone using their own stand-alone Excel. Theyre not connected, and theres no security on Excel,” said Dan Vesset, an IDC analyst. “Its hard to maintain metadata and master data. … [But if Excel is] tied to the back-end BI server, all that logic is stored at the server level, and Excel becomes an end-user interface.”
As far as the cost argument goes, regardless of what Cognos or other BI vendors protest, the fact of the matter is that Microsofts offering is “quite attractive,” Vesset said. The server will cost about $5,000, and the CAL (client access license) will run about $175 per user.
“You dont really get BI for free from Microsoft,” Vesset said. “You do have to buy the database license. If you want to scale you need to buy more database licenses. As such, the argument from Cognos is somewhat valid, but most companies, theyll [upgrade to Office 12] anyway, so its not an add-on cost.”
In fact, the added BI goodies will work as just one more lure to upgrade, Vesset said.
But selling more SQL Server 2005 and Office 12 is the main point, not getting good, deeply functional BI into the hands of the masses, said Rene Bonvanie, chief marketing officer at Business Objects.
“Theirs is a strategy to sell more Office 12,” he said. “They have a troublesome time getting Office adopted. Theyre in trouble getting people to move off previous Office versions. This is a more interesting way to convince people to move than a squirrely little line under [search term results].”
But customers dont necessarily agree. Laura Gibbons, manager of customer satisfaction and Six Sigma for Expedia, said that harnessing the power of Excel “excites [her] personally, very much.”
“Microsoft is giving users the ability to do that without [having to write code],” she said. “The ability to collaborate across the enterprise, the persistence of data instead of having it in spreadsheets, and you can do it cross-functionally across the organization. … Control in Excel was just a huge … I wouldnt say limitation, its too strong a word. But in the previous version, you had multiple versioning, and people breaking formulas. Now you can control it end-to-end. Its just exciting.”
Gibbons said that, compared to enterprise-grad BI platforms, Microsofts Office 12 scenario is still “very cost-effective.” One mitigating factor, she said, was that most users know how to use Excel, to some extent, thus removing the need to train users on complicated BI platforms.
But another unclear piece of Microsofts BI puzzle is whether all data has to be on SQL Server to get the full promised BI capabilities, according to Cognos Hill.
“Office 12 has a brand-new version of Excel on the desktop. For the BI functionality for analysis, they have a server addition of Excel that you interact with. Whats not clear yet is, OK, if I want to interact with the data using the server edition of Excel, can it be out in existing versions of databases, or does it have to be in the local version of SQL Server?”
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Vesset pointed to Integration Services, an integration tool Microsoft has had for several years, as being quite capable in taking care of that issue.
For her part, Gibbons said she has “absolute trust” in Microsofts ability to handle data flowing from heterogeneous databases. “Weve used them so long now, regardless of issues, we know we can use them,” she said. For example, data stored in Expedias Hyperion BI application easily interacts with Excel, thanks to Hyperions facility in moving data in and out of spreadsheets, she said.
Will Microsofts BI push manage to shove Hyperion et al. off the playing field? Howard Dresner, Hyperions chief strategy officer, thinks not. “Microsoft has been in the BI market for a dozen years,” he said. “And were still standing. I wonder why? Its a bit of Chicken Little: The sky is falling. Its a growing market with lots of opportunities for everyone.”
Vesset said IDC estimates 10 percent compound annual growth rate in the BI market for the foreseeable future. Out of that, players like Hyperion have a big part to play, for the foreseeable future, he said.
“Hyperion, Cognos, they have two product lines: One is BI tools and one is packaged analytic applications,” Vesset said. “Theyre primarily for financial functions: consolidation, budgeting, planning, allocation processes, etc. That is not what Microsoft is releasing, thats true. Theyre not releasing any packaged analytic applications, other than the score-carding product, which is more of a generic process for business process management.”
Hyperion has a better packaging of that process, Vesset said. What Microsoft will do to fill in that gap will be to partner. But the way things stand, Microsoft still has a ways to go before Cognos et al. will have cause to lose sleep at night.
“I just think, as always, nothing happens overnight,” Vesset said. “Microsoft released their first OLAP product in 1998. It took them probably five years to become one of the leading vendors. Special vendors certainly arent going anywhere. Nevertheless, there will be a fairly significant impact on the market with Microsoft putting more focus on BI.”
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