Q&A: Microsoft’s Business Intelligence Strategy

REDMOND, Wash., June 6, 2006 – Microsoft today announced Microsoft Office PerformancePoint Server 2007, a complete Performance Management (PM) application including business scorecarding, analytics and planning that is designed to enable companies to more effectively plan and manage their businesses. This new application represents the latest Microsoft investment in business intelligence (BI). PressPass spoke with Lewis Levin, corporate vice president, Office Business Applications, about Microsoft’s BI strategy and the forthcoming performance management offering.

PressPass: Can you describe Microsoft’s approach to BI and how PerformancePoint fits in?

Levin: At Microsoft, we believe BI has to become more accessible, easier to use and more affordable. There’s probably not a decision people confront that couldn’t be more effective with the right information delivered at the right time. Not all decisions are big and important, but it still matters that people are effective and doing the right thing, applying their time to the right customers, and focusing on the right problems. This is what BI is about. So we think BI has got to be something that companies are comfortable providing to nearly everyone. That will happen when BI solutions deliver a user experience that makes it easy to work with information, and when the price comes down.

We also believe that it’s important that information workers have a way of understanding what’s going on in the business in practical terms that are actionable. The transaction level detail you get from an ERP system doesn’t really help you understand what’s going on. People think in terms of, “Should we sell more of this product? Should we go into this new sales territory? Should we open that store? Should we hire some more sales reps? Should we consider another supplier?” These are questions that are actionable, and BI software should help people think about these questions and take action. That’s where Performance Point can help; it allows people to get a higher level business focus on their information.

PressPass: How will Performance Point compare to existing performance management solutions?

Lewis Levin, Corporate Vice President, Microsoft Office Business Applications

Levin: When we set out to develop PerformancePoint, we started with a vision of an integrated product that would provide forecasting, planning, budgeting, consolidation and financial reporting, and scorecarding altogether, and so we had the opportunity to start down the path of building one product. Also, we’re delivering Performance Point on Microsoft’s integrated BI platform. So even though some of the features aren’t in Performance Point itself, they all work with Performance Point. For example, if you run Microsoft SQL Server, you can move data into Performance Point using SQL Integration Services, you can report in PerformancePoint using SQL Reporting Services, and we utilize SQL Analysis Services, so any client or product that works with Analysis Services will work with Performance Point.

For collaboration and visualizing your business intelligence data, we integrate with the 2007 Microsoft Office system so that you can use your familiar end-user tools like Microsoft Excel to perform your analysis and Microsoft Office SharePoint Server to share and collaborate on that analysis.

Existing solutions from other companies have been cobbled together and built on fundamentally different platforms, which means they sometimes use different basic data storage, or different development approaches or have different reporting solutions. We’re building a well-integrated solution on an established and integrated platform. The benefit for customers is you get the flexibility of meeting users’ needs the best way that you can. If you want production reporting, it’s there. If you want heavy-duty analytics, it’s there. If there’s some data source that is unique and you need to handle it, the capabilities are there.

PressPass: You’ve said PerformancePoint is built to handle real-world complexity. What does that mean?

Levin: A complex business just doesn’t fit into a single cube. For that reason, we’ve built models and we have mapping between models that’s almost like spreadsheet links but a lot more powerful. So, for example, you can represent the business drivers for a division and show how that relates to the way you report financials at the corporate level. Or you can get the sales forecast to link up with the manufacturing schedule. We actually make the ability to combine these models together and report across model as part of the product; it’s not an afterthought or something the customer has to figure out how to program. The result is that customers can focus on their business data in the same way they think about their business.

PressPass: How does PerformancePoint enhance the relationship between IT and the business user?

Levin: These are critical applications with critical data, so IT has got to provide the infrastructure and the security framework around it, and we make that possible. But really modeling the business with deep understanding requires knowing a lot about the intricacies of the business – the history and tricky things that people have figured out over time. Most solutions require the business analyst to translate that to someone in IT. But with PerformancePoint, we make it possible for the business analysts to actually describe the business and create the KPIs and the business rules in the application directly while relying on the infrastructure and security provided by their IT counterparts. The Business Modeler design tool makes this possible, and really sets PeformancePoint apart from other solutions out there.

PressPass: How does PerformancePoint compare to Microsoft Office Business Scorecard Manager?

Levin: There will be a new upgraded version of Business Scorecard Manager in PerformancePoint. It will integrate with all the other capabilities of Performance Point we’ve talked about. For example, you can create new KPIs from data that’s in the Performance Point models. So as you revise your plans and forecasts with PerformancePoint, your scorecards will be automatically updated. We think scorecarding is really the broad entry point to performance management (and the PerformancePoint offering) because almost anyone wants insight about how they are doing relative to their goals or how they’re contributing to organizational goals. Business Scorecard Manager will continue to be an important element of our BI offering going forward, and we’ll continue to offer it and price it in a compelling way.

PressPass: Can you give us an update on the recent agreement to acquire ProClarity, and what is the roadmap for those technologies?

Levin: We’ve completed the ProClarity acquisition. We’re enhancing ProClarity’s advanced analytic and visualization technologies, and we’ll be incorporating those into PerformancePoint. In the meantime, we’ll continue to sell and support existing ProClarity solutions, and customers under maintenance will be able to access the same functionality in PerformancePoint Server.

PressPass: How does PerformancePoint relate to Microsoft Dynamics?

Levin: We’ve worked closely with the Microsoft Business Solutions team during the planning and development of PerformancePoint. The Microsoft Dynamics roadmap includes plans to take advantage of and integrate with PerformancePoint by tailoring it for the specific needs of Microsoft Dynamics customers, including specific efforts to ensure that the functionality and capabilities found in present Microsoft Dynamics BI solutions are integrated with and available as part of PerformancePoint.

PressPass: How do you see the relationship between BI and enterprise content management evolving?

Levin: We think that unstructured information that lives in Microsoft Word documents, Microsoft Excel spreadsheets, or Microsoft PowerPoint presentations is typically the starting point for most businesses as they think about their plans and business results. The structured world of BI has been separate from the unstructured world of creating and sharing Office documents, but that’s changing. For example, by delivering BI via SharePoint you can now do all the structured processes around planning or forecasting or analyzing the business while integrating that with all the rich information that you use to describe your strategies, to talk about your plans, evaluate competitors, etc. These two worlds are really coming together.

PressPass: What about search and BI how are these capabilities interrelated?

Levin: One of the challenges in searching any business information, whether it is structured or unstructured information, is that there is so much of it. How would you deal with millions of hits? It would be kind of crazy. We’ve worked hard to integrate our Enterprise Search engine in Microsoft Office SharePoint Server with our BI technologies to provide a single, integrated way to search both sets of information. Plus, with the new relevance tuning in SharePoint, you get back the right results on the first try. Once you get the results, you can turn those results into action with PerformancePoint by navigating the structure and hierarchy of the information and performing business actions.

There’s more work to be done on this, but the scenario of being able to search into the dimensions that describe the data instead of wandering through all the raw data itself is very appealing and something we’re working towards.

One example of this integration is included in the 2007 Microsoft Office system, where reports, including Excel, SQL Server Reporting Services and PerformancePoint reports in SharePoint’s Report Center will be searchable. So when these products ship, you’ll actually have a fairly quick way of getting very specific, digestible results, and then you can launch into those results and do the additional analysis.

PressPass: Why this market, why now, why Microsoft?

Levin: Performance management is a natural market for Microsoft to address because we’ve done the BI platform work in SQL Server, we provide the end-user tools through Office (with Excel and SharePoint), but there’s also a kind of organizational or business focus to BI that’s increasingly important. That’s where we describe our businesses, we have common business rules, people can share the definitions, look at the information the right way, and also have an organized process for collaborating on things like a forecast or financial reports. Our products have been used in combination with additional solutions for this purpose by a lot of companies for a long time. Customers are ready for a new Microsoft product that meets this complete need.

And this category, performance management, has been waiting for someone to do it right. Today, there exist a lot of point solutions that aren’t integrated and aren’t delivered on a consistent, competitive platform. The opportunity really opens up with the right platform, the right kind of integration, and the right product. A lot of work we’ve been doing over the past several years now comes together in a very complete and well integrated offering. We’re pretty bullish about PerformancePoint; now customers can bet on Microsoft for BI.

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