Commentary: The false dawn of Microsoft PerformancePoint Planning |
You can contact Nigel Pendse, the author of this section, by e-mail on nigelp@bi-verdict.com if you have any comments, observations or user experiences to add. Last updated on June 19th, 2009.
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PerformancePoint Server 2007 was announced publicly on June 6, 2006. It included several existing Microsoft products, including the home-grown Business Scorecard Manager and the then recently acquired ProClarity, as well as acquired components like FRx from its Dynamics product line.
But the big news was the all-new planning and consolidation component, which had been under development in secrecy since 2003, under the Biz# code-name. This was to be a high-end financial analytical application which focused initially on budgeting, planning and management consolidation, with additional financial consolidation features to be added in later releases. Unlike most other CPM vendors, Microsoft planned to integrate planning, budgeting, consolidation, scorecards and reporting into one single product, not a suite of loosely integrated components.
This new planning product was built on SQL Server and Office, using both Analysis Services and SQL Server, as well as Excel and SharePoint. But it was a substantial project in its own right, much more than just an application template. We were first briefed on it in April 2004, and had mixed feelings: it was clearly an ambitious project that should, eventually, be a very scalable, sophisticated solution. But we feared that it would take several releases, and years of development, to have the full range of necessary functionality. And we were confused at which market Microsoft was aiming it at.
We commented in our preview in September 2007, before the first release, that:
Unlike Oracle, Business Objects and Cognos, Microsoft decided against entering the planning and consolidation markets through acquisition … but decided instead to develop its own product from scratch. This was a brave move, as market entry was delayed by several years, the initial product is bound to be less functional, and there is less certainty about the result. Indeed, the Biz# project has duly suffered delays, and PerformancePoint is now probably about a year behind its original, rather optimistic, internal schedule (with some of the delays being due to the relatively late decision to add ProClarity to the mix). The potential benefit of this start-from-scratch approach is that Microsoft enters the market with a clean new product, with no inherited weaknesses or historical baggage.
But the bigger problem that we saw was that this was clearly intended to compete with Hyperion’s financial applications, and was at least as complex as those products, while being much less complete. It looked like the sort of product that could be sold by a focused financial analytical applications sales team, not Microsoft’s generalist, technical sales teams. The PerformancePoint sales people would require hands-on experience of planning and consolidation applications, and the ability to empathize with the CFO and controller’s problems, not the CIO. Consultants who implemented it would also need considerable skills in this application area, as well as in Microsoft’s BI products.
We just couldn’t see how this could fit into Microsoft’s mass market model, where products need to be easy to deploy, simple to use, inexpensive and suitable for organizations of all sizes.
Eventually, after repeated delays, PerformancePoint Server 2007 was finally released in late 2007. Arguably, it was both late but also released too early — it seems that management pressure forced the release, whether or not it was ready.
It got an early boost as Software Assurance-paying ProClarity customers qualified for a free upgrade to it. In theory, this could have led to a very quick ramp up of the number of users of the new Planning component.
After all, all ProClarity customers already have SQL Server, including Analysis Services, and Excel, so the new planning component would not only be an excellent technical fit, but provided at little or no additional cost. Even if the first release was incomplete, the familiarity with the rest of the Microsoft stack should compensate. And gaps in functionality could be plugged using other features in Excel and SQL Server.
The release of PerformancePoint certainly seems to have shaken the market: in quick order, the three most obvious competitors, OutlookSoft, Hyperion Solutions and Cognos were taken over. The general feeling was that, even if the first release was unfinished, Microsoft had proven staying power and would get it right by the traditional third release. It could afford to fund the investment, and was certainly in no danger of being taken over. Microsoft had repeatedly shown real tenacity with new products that had initially faltered, and we along with most other people expected PerformancePoint Planning to go the same way.
Despite all the positive auguries, it seems that PerformancePoint Planning has flopped.
Microsoft announced on January 23 that it was to be discontinued. There will be a final SP3 Planning release in mid 2009 to deal with immediate customer issues, but no further enhancements. It is possible that some planning functionality will be added into other Microsoft products, such as Analysis Services and Excel, but this will not be based on the abandoned PerformancePoint Planning product.
The Biz# project will have run for almost six years from commencement to abandonment, with little to show for it apart from some disappointed customers and partners.
Perhaps this failure was partly because of the product’s complexity. We had commented in our preview that, “both building and using models is more technical than we would like. The clunky user interface certainly requires more work … application development with PerformancePoint may be more laborious and hit-or-miss than with more mature products”.
One particular problem is that PerformancePoint includes very sophisticated currency conversion and partial ownership capabilities to support its intended future role for financial consolidation. But while the first release burdens the planning user with a lot of irrelevant consolidation options, it is not yet complete enough for serious consolidation applications. It also has less budgeting functionality than major competitors. In fact, it even lacks web-based data entry, an omission almost unheard of in any modern planning product.
Another problem is that a version 1.0 product like PerformancePoint Planning (unlike the other, much more mature, PerformancePoint components) needs quick follow-up releases to respond to early customer feedback. But Microsoft had linked it to the multi-year Office release schedules, which are entirely suitable for widely deployed, mature products like Office, but entirely unsuitable for an incomplete young product like PerformancePoint Planning. This means that early adopters of PerformancePoint Planning would have to wait years for critical new features, without which their applications might be unusable.
Furthermore, the target market for a high-end product like Biz# is small and already saturated. Only a relatively small number of large multinational businesses need this sort of advanced product, most of which already use CPM suites from other vendors. Such organizations are all Microsoft customers for Windows and Office, and perhaps a few other products (but less commonly BI), but the majority of Microsoft’s customers are in the mid-market, which want simple, low cost, easy to deploy solutions. While Microsoft could price PerformancePoint as low as it liked, there was no getting round the fact that the planning component was an inherently complex application, and quite unlike the tools that make up the rest of the Microsoft BI product line.
In our view, the Biz# project should probably have been abandoned much earlier. Many ambitious research projects suffer this fate, and it is no shame when they do.
The mistake Microsoft made was to plow on even as it became increasingly apparent that this was a troubled project: repeatedly delayed, not well aimed at the market and out of synch with Microsoft’s sales machine. Microsoft can sometimes get away with such mistakes (as with Vista), but it is much harder with an all-new product entering a well-served market where Microsoft is not even present. Perhaps it takes a severe credit crunch for Microsoft to be forced to show the prudence that is routine for any small company. It is probably not entirely coincidental that this news was released the day after Microsoft’s poor quarterly results announcement on January 22.
ProClarity and Business Scorecard Manager will be moved into and bundled with Office SharePoint Server, Enterprise Edition (which also includes Excel Services). This is good news for any maintenance-paying ProClarity or BSM customers, as they will get a free, license-for-license upgrade. The products will be rebranded (again) as PerformancePoint Services for SharePoint, and future upgrades will be as part of SharePoint. This should help both SharePoint and ProClarity customers. Of course, this also confirms what was already obvious: all of Microsoft’s BI future reporting and analysis will be Web-based, with no thick client option other than Excel (so no more desktop ProClarity equivalents).
It is less clear what will happen to any customers who have succeeded in deploying PerformancePoint Planning. The number cannot be large, but is probably greater than zero. There are also partners who have invested time and resources in PerformancePoint, whose efforts will turn out to have been wasted. Microsoft, which does not often abandon products in this embarrassing way, will need to do whatever it can to placate them.
As part of this effort, Microsoft later agreed to release the source code and project files derived from PerformancePoint Planning as the Financial Planning Accelerator (FPA). This will be available to consultants who create and maintain Analysis Services-based planning applications for customers with SharePoint Server Enterprise licenses.
Microsoft says that despite stopping development of PerformancePoint Planning it will, “continue supporting our customers’ planning implementations of PerformancePoint Server well into the next decade,” although it is unclear how this is consistent with the statement in the same document that, “we will no longer continue with a standalone version of Office PerformancePoint Server”.
Microsoft’s reputation has suffered through this debacle: in future, customers may be less prepared to soldier on with weak early releases of Microsoft products in the confident expectation that the problems will be fixed by the third release.
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