Microsoft Corp. this month detailed its strategy to intelligently gather and analyze business data by linking its Office applications and back-end servers while emphasizing future developments.

Microsoft has released not only the long-awaited SQL Server 2005, with its business intelligence enhancements, but also Microsoft Business Scorecard Manager 2005, which was announced this month.

In addition, Microsoft said that Office 12 components due to ship by the end of 2006, specifically Excel and SharePoint, would figure prominently in the business intelligence (BI) push. Microsoft is trying to create a bundle of BI tools that lets users gather, store and analyze data for tasks such as decision support, query and reporting, online analytical processing, statistical analysis, forecasting and data mining.

Observers note Microsoft is trying to establish the BI interface as part of its multiple integration projects around Office, its dominance on the corporate desktop and its wish to ignite Office upgrades.

“Microsoft has been acting on the realization that Office is a ubiquitous tool in the enterprise,” said Joshua Greenbaum, a principal with Enterprise Applications Consulting. “This is a way for them to leverage what they are good at, which is the interface and the Office environment, and still be able to say they are a player in the enterprise software market,” Greenbaum said.

But Microsoft and market leaders such as Business Objects and Cognos are missing a fundamental issue, he added. “The world does not need more [BI] tools, it needs [BI] solutions. Companies need to be told where to go, what to look for and what to do with the results.”

A study by Gartner earlier this year concluded that an obstacle to BI deployment is a lack of user skills and knowledge of best practices. Others agree with that assessment, including Jeff Raikes, the president of Microsoft’s Business Division, who said that Microsoft sees an opportunity because “users see [BI] as inconvenient, expensive and hard to use.” The company has been molding SQL Server into a BI platform since the mid-1990s, experts say, adding services for integration, analysis and reporting.

“With Microsoft, [BI] begins with SQL Server,” says Chris Alliegro, an analyst at independent research firm Directions on Microsoft. “But one of the challenges that Microsoft has faced in the past is that it provides [BI] infrastructure, but it does not provide any sort of end-user product.” Still, some say that change may not help.

“The problem with Office is that its connection with [BI] is just one of many things that Microsoft is trying to do with that product and the question is, will Office do so many things that it will do nothing very well? That is the thing that customers need to watch out for,” says Joe Wilcox, an analyst with Jupiter Research. The other issues are when and if users will adopt Office 12.

A Jupiter Research survey showed that 39 per cent of businesses with 250 or more employees use Office 2003, which shipped two years ago.

Potential competitors say Microsoft is stretching things. “[BI] is not about Office,” said Gerry Cohen, CEO of Information Builders Inc., makers of WebFocus BI software.“There might be some nice apps that hook into Office, but labeling it a big [BI] initiative is misleading.”

Neal Hill, senior vice-president, corporate development, for BI vendor Cognos Inc. in Ottawa, said that Microsoft still lags in terms of competing in the pure play enterprise BI space.

“They are trying to create a product offering in a servicing capability that convinces the enterprise to put this stuff in instead of what we do,” Hill said.

Cognos recently unveiled its Cognos 8 BI platform.

“(Microsoft’s strategy) is more functionality and a different, broader approach, but we don’t expect it to have a major impact in the large enterprise, which is our focus.”

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