'Katmai' to Anchor Microsoft BI Strategy

Microsoft pushed hard into the BI market with its 2007 product release cycle, including Office, SharePoint Server and PerformancePoint Server. The strategy extends earlier work with Exchange Server 2003 and Office 2003, where Microsoft positioned its productivity suite as a front end—or in company parlance, "smart client"—for back-end processes, such as enterprise resource management.

It's significant that Raikes spent so much time discussing Katmai, a product from another Microsoft division, Server and Tools. During its 2003 release cycle, Microsoft embarked on the "integrated innovation" strategy, which dramatically increased cross-integration of features among its products. The integration has been most pronounced between Office and server software.

Microsoft's integration strategy stacks vertically from the desktop to the server and horizontally among products and platforms. As a general but not absolute rule, Microsoft provides customers with pervasive services, such as Rights Management, SharePoint or Windows Media, and technologies like .NET Framework, often at no extra cost. These services are incorporated into platforms, such as Office System and Service System, for which Microsoft charges customers.

Integration has three straightforward potential benefits for Microsoft:

• Integration along the vertical stack creates sales pull from the desktop to the server. Microsoft can leverage Office's dominance on the desktop to gain traction for its server software.
• Integration pulls upgrade sales to the desktop from the server. Office's dominance has created a situation where Microsoft competes with its older products, and not always with great success. Integration creates server dependencies that often require newer versions of Office and other desktop products.
• Horizontal and, particularly, vertical integration create dependencies that act as natural barriers to adoption of competing products. Microsoft's tight integration along the vertical stack, with Office as the front end, is a potential inhibitor to Linux adoption. Linux adoption on the server hasn't successfully advanced to the desktop in part because the same kind of vertical integration is so weaker there.

Microsoft's BI initiative is a huge extension of this strategy. But to get there, businesses must invest in multiple Microsoft products to achieve the intelligence success outlined by Raikes today. For companies that already have acquired or plan to deploy some of these products, or for those with Software Assurance upgrade protection, Microsoft is providing alternative tools to those offered by other BI vendors.

The crux of Microsoft's strategy is the ubiquity and familiarity of Office and its install base of, according to Raikes, 500 million users. But Office 2007's revamped user interface, the "Ribbon," undermines the familiarity proposition.

Raikes said that Microsoft would "deliver BI inside where your information workers work," referring to Office. The approach would allow "[you to] simultaneously look in the rear view mirror while you're contemplating where to go next."

Office isn't the only viable BI front end, however, particularly with technologies like AJAX extending Web browser capabilities.

Microsoft's big challenge will be on the back end, where the real intelligence lies. Today Raikes emphasized the importance of unstructured data storage in Katmai. SQL Server has traditionally been a better resource for structured data, and Microsoft's first-generation BI tools are geared more for structured data, too.

Raikes is right about the importance of processing unstructured data and gleaning more relevance from it. Most organizations generate mountains of unstructured data, with Office being the primary mechanism. From that perspective, Raikes' articulated BI strategy explains how Microsoft plans to resolve shortcomings with its own technologies. Businesses generate too much unstructured data from which Microsoft tools could extract more intelligence.

Microsoft should have fully addressed the unstructured data problem with release of SQL Server 2005, which was supposed to come with the WinFS file system. Early signs are hopeful that Katmai will do much better with unstructured data than SQL Server 2005.

But Katmai is the far future. Nearer is PerformancePoint Server 2007, which Raikes said would ship this summer. Meantime, Microsoft today announced the acquisition of the OfficeWriter reporting tool from SoftArtisans.

Raikes made bold predictions about what Microsoft would do for BI, bringing it to 10 times the number of people as today.

He also hinted—and quite subtlety—about future direction. Raikes referred to Microsoft's strategy as "your data, anytime, anyplace." Web 2.0 shares a similar goal, of making data available anytime, anywhere and on anything. The difference: Web platform companies generally hold onto the data and deliver it back to the customer in a Web browser or other client. Microsoft would give businesses the tools to keep control of the data—and excise more meaning from it—while delivering it anywhere.

Mobile workers add great value to organizations, but they also generate great security, privacy and regulatory risks in the data they carry on laptops, PDAs and other devices. The challenge for any organization is the same: Provide anytime, anywhere access without letting information leave the confines of the business. Solving that problem would be true business intelligence, even if it has a different meaning than the one used by Raikes today.