Microsoft surprised the market by announcing its intention to stop selling PerformancePoint Server (PPS) as a standalone product, just 17 months after its original launch. The fallout from the announcement is immense, marking a withdrawal from the enterprise performance management (EPM) software market and a retreat back to developing business intelligence and analytic tools (rather than solutions) for the mid-market. We believe this was a tough, but necessary, move for Microsoft. However, we question whether SPS is the best home for a lightweight version of PPS's capabilities.
While the scorecard, dashboarding and analytics functionality of PPS gets folded into SharePoint Server (SPS), its core planning, budgeting and forecasting components will cease to be developed as a standalone product, though this functionality will be offered through a mish-mash of products included in Microsoft's Dynamics enterprise resource planning and customer relationship management applications suite.
EPM is now off Microsoft's à la carte menu, but offered as a snack
This is a tough decision for Microsoft. Pulling PPS so soon after its launch is an embarrassing U-turn for the company - although it was sensible. To be successful in EPM, you need to command a degree of respect in the office of finance, from which most EPM initiatives are seeded and driven. This is something Microsoft never managed to accomplish, despite the prevalent use of Excel in finance departments.
From a commercial perspective PPS, compared to other parts of Microsoft's successful BI business, was hardly selling like hot cakes. When it was launched PPS had big designs on commoditising the EPM market, much in the same way that Microsoft has tried (and done) with the OLAP and enterprise reporting market. However, EPM proved to be a different kettle of fish, requiring a more complex, advanced development capability that differed from the familiarity of building generic BI tools. Microsoft also over-simplified the effort that was needed to target EPM customers. Having a broad-ranging partner ecosystem and setting up a dedicated sales team was not enough. The company lacked domain expertise and an effective consulting organisation to implement EPM solutions. Moreover, Microsoft never had a great track record for nurturing and trailblazing new products in new markets. Microsoft's recently reported weak second-quarter earnings and layoffs might also have contributed to the axe falling on unprofitable product lines.
By withdrawing PPS from the EPM market, Microsoft is effectively retreating to familiar turf by relying on its partner network to develop performance management (PM) application logic and apply industry knowledge on top of its BI stack - that is, SQL Server, Sharepoint and Excel. While Microsoft is leaving the PM application business, it is not leaving the PM market altogether; it is simply choosing to provide PM as a side dish rather than a main course.
SharePoint is probably not a viable home for PPS functionality
The monitoring (scorecard and dashboard) and analytics (ProClarity) capabilities of PPS will be rebranded as “Performance Services” and included as part of Microsoft's SPS platform.
Microsoft justifies the move in the context of its 'BI for the masses' strategy. SPS is currently one of Microsoft's hottest-selling products, and is experiencing rapid adoption among Microsoft's own customer base. Recognising the intertwined benefits of using SPS as a delivery platform for performance-related scorecards and dashboards, Microsoft had also built integration between the two environments with the former Business Scorecard Manager product before this announcement.
This might justify SPS being a natural home for PPS dashboards and scorecards. However, it also leaves the question of what environment customers will be provided with to build the scorecards and dashboards in the first place. An even more confusing addition is the inclusion of an analytics component in SPS, since Microsoft's other analytic components are aligned with SQL Server and Office. Hence, will the move to bundle lightweight performance management capabilities into SPS really help to simplify Microsoft's broad portfolio of BI and analytic assets, which now seem to be spread across three environments (SQL Server, Office and SharePoint)? Probably not, given that SQL Server is the most obvious home for all things BI and analytical. This begs the question of why Microsoft did not simply push PPS as another 'free' add-on for SQL Server. Nevertheless, tapping into a hot-selling product such as SPS is a good way to seed the market with lightweight functionality that customers might or might not need or use - a strategy that Microsoft has historically excelled at.
Source:ovum.com
