Microsoft a Leader in Business Intelligence

Implications: Microsoft has made surprising progress in the last 2-3 years to get into Gartner’s leaders magic quadrant.  The recent massive consolidation in the BI market gives Microsoft a window of opportunity to win market share at the expense of the well-known vendors. 

Analysis:

Ask most people to list the leaders in BI, and few of them would put Microsoft on that list.  Yet according to Gartner (see associated article) Microsoft is now among the leaders, and actually surpasses some well-known names in ability to execute.  BI has traditionally been expensive to buy, expensive to implement, and difficult to use.  Deep training is needed for most users, and typically only a few financial staff ever really fully utilize the tools.  There are well-known exceptions, of course, particularly in the retail industry where the ROI for BI has been easier to demonstrate.  Nonetheless, in general BI has remained a specialized tool used on a limited basis by some, and deeply by only a few.  Microsoft’s BI strategy is attempting to change this.

Microsoft is pushing the BI market to change from an expensive and complex solution to a commodity solution suitable for everyone.  Their BI product suite is based on the Office suite (on almost every desk), the  PerformancePoint Server, and SQL Server, both relatively inexpensive and easy-to-implement products.  The combination of standard components with a simple, known user interface makes a compelling story for many customers. 

The recent massive consolidation in the BI market (SAP acquired Business Objects, Oracle acquired  Hyperion, and IBM acquired Cognos) has thrown the entire market into chaos.  With three of the biggest competitors all acquired at essentially the same time, little remains dependable in the BI market.  Current customers will be wondering how long the current product roadmap will last.  Potential customers will be waiting for the market to settle to see which vendors to chose and what products may be available long-term.  Any BI purchases made today may become obsolete tomorrow.  Existing BI investments may already be on their way to the scrapheap.  All three of these companies understand the enterprise customer, so they won’t summarily discard any existing products, but a BI investment is for the long term and it’s not clear what the product roadmap is going to be long term.

This confusion in the market comes at an ideal time for Microsoft.  They now have a strategy and the products to back it up, at the exact time the market is looking for a new direction.  This window of opportunity will likely only last a couple of years.  SAP, Oracle and IBM will have clearly defined product roadmaps available within a year or less, and will likely be delivering future products within a couple of years.  Between now and then their market is vulnerable.

If Microsoft can capitalize on their current products and today’s market confusion they can potentially increase their market share dramatically.  While they may not unseat the current market leaders, they could take some business from them.  In addition, by providing BI as a commodity they are effectively opening a whole new market for BI, one which will dwarf the existing market.