Intelligent Enterprise

Microsoft is certainly on a roll when it comes to business intelligence. According to its marketers, the Redmond, Wash., software maker is feeling pretty darn good after a favorable report from International Data Corp. In its look at the 2005 BI market, IDC said Microsoft grew its revenues by 25.5 percent, substantially more than any other top-five vendor.

In addition, IDC said Microsoft's strategy of embedding BI in SQL Server is an example of an "evolutionary change" put into motion by database vendors. Also, Microsoft's plans to focus on Excel as a key interface for BI is expected to be a serious threat to competitors.

Despite being a relative newcomer to the market, Microsoft's impact has been significant. Microsoft became a top-five vendor in the market in 2004, when it debuted at number four after growing revenues by 125 percent from 2003, according to IDC. The company held the same spot last year with 6.2 percent of the market. The company's recent acquisition of ProClarity, which filled an important gap in its portfolio, is sure to help keep Microsoft among the handful of leading vendors.

With all this strong momentum pushing Microsoft forward, one has to ask whether it has an Achilles heel. Mark Smith, CEO and senior vice president of research at Ventana Research, says Microsoft's moves, particularly its plans for Office PerformancePointServer 2007, are a "big wake-up call for the other major players -- Oracle and SAP in particular."

But before companies flock to Microsoft, there are some things to consider. First there are the hardware and infrastructure problems that are sure to arise in deploying a new version of Office. Smith is advising potential customers to pay close attention to whether Microsoft knows how to be a direct seller to large corporations. In the past, the company has depended on its many partners to sell and service the enterprise.

Then there's the problem of product release cycles. Microsoft's traditional three- to five-year cycles won't work, if it hopes to meet customers' demands for features that will keep them competitive, Smith says. In addition, Microsoft has to deliver products that take organizations forward without causing drastic changes in their IT systems.

Microsoft, of course, would like companies to wait until it rolls out its new BI products in mid-2007. Companies, however, should consider carefully whether to wait, or turn to Microsoft's rivals who may have what they need now.

Drop me an email to let me know what you think.

Meanwhile, in the latest unscientific poll by Business Intelligence Pipeline, readers were almost split on whether they prefer to have BI functionality delivered over the Web. Fully 51 percent said they'd prefer to run the applications in-house, with the remainder saying they'd prefer subscribing to a Web-based system.