Thursday, January 29

Microsoft bundles BI software - what they are doing unveiled

The inevitable nature of big companies is to lock customers into their suite of products. For instance, Oracle started with databases, now bundles financial and integration software with their database. Customers are told it's easier to use their add-on, value-add products than use another vendor and get into compatibility issues. Add-on, value-add products are sometimes free, enticing you even more.

So it comes to no surprise that Microsoft has announced they have tightly bundled their BI software, PerformancePoint Server, with their document management software, Sharepoint. Joined at the hip, you cannot buy one without getting the other.

Comparatively to other BI vendors, Microsoft has the only bundled BI, document management, workflow, collaboration software on the market (I think). IBM Cognos, SAP Business Objects, and Oracle Hyperion are behind with this endeavour - they haven't tightly integrated BI with their other software.

Each of these competitors to Microsoft have similar software breadth but Microsoft's tight integration is a step ahead. It may take years for IBM, SAP, and Oracle to properly integrate BI, document management, workflow and collaboration.

But what about the customers? On the surface, the tight bundling can be viewed as positive. You could be using Sharepoint and now want some BI reporting. Or maybe you have PerformancePoint reports and need to manage documents.

Tackling both BI and document management pieces is challenging.  Without considering planning, governance, and skillsets, you will most certainly encounter serious setbacks.  Or worse your vision is restricted to an unimpressive rollout.

Here are some problems you may encounter with tight bundling of BI and document management.
  1. Standardizing on Microsoft, Oracle, IBM, SAP technologies requires highly paid IT resources and/or consultants (not great for this economic climate)
  2. Very different skillsets are required to build Sharepoint sites vs PerformancePoint reports (need to hire more staff and/or pay for more IT training)
  3. Goverenance and best practices are very different for managing BI vs documents (different knowledge needed, so twice the effort)
  4. Locked into sole-source agreements (difficult switching BI or document mgmt products for a better and more cost effective product in the future)
Putting those concerns aside, there are positives in Microsoft's story.  Microsoft's price point is unbeatable when compared to other on-premise vendors.  This can offset additional costs (see points above) and make your entrance into Document Management and Business Intelligence a little easier.

The question is whether the competitors - Oracle, SAP, IBM - will compete directly by integrating their products with BI.  Here's my thoughts on where these companies are going.
  • In the case of SAP Business Objects, it's natural direction would be to simply use Business Objects as the reporting engine for the SAP application (do away with SAP's current BW).  Perhaps keep Business Objects as a stand-alone BI product set... perhaps.
  • Hyperion is a natural fit for Oracle Financials.  Hyperion was deeply entrenched within the financials of large companies.  But Oracle has many other products that could work along side Hyperion's BI.  For instance, SOA/messaging integration replacing traditional ETL (or parts of it).
  • As for IBM... guessing where they are going is just a gamble.  I don't have any insiders that could give me hints.  IBM and Cognos were working together prior to the acquisition and you look at the breadth of products, consulting division and R&D coming out of IBM... well your guess is probably as good or better than mine.


Niheel Patel said...

Tom you make some good points. Dealing with workflow is though enough across multiple systems. It's not a bad thing that the vendors are doing this. Ultimately it will lead to more consolidation and product integration in the market place.

Tom Hudock said...

Niheel, product consolidation may not be a bad thing for the technology. Customers appreciate it when products from the same vendor work better together. And perhaps BI, documents and workflow should really be one product anyway.

Companies try to lock in customers through bundling and consolidation. But bundled software doesn't always mean the best choices for customers.

I've seen many customers select a product because it came free with their existing software, not because it was the best choice. At the end of the day, they may have spent the same or more customizing bundled software than integrating a 3rd party product that was a closer fit originally.

Perhaps "the best things in life are free" doesn't always apply.