In-Depth

Microsoft’s Office: A BI Trojan Horse?

One analyst says Office has become a BI Trojan horse as Microsoft builds in more BI capabilities and more end users start to work with it.

• By Stephen Swoyer
• 08/25/2004

In June, Microsoft Corp. released two new BI add-ons for its Office productivity suite, the Microsoft Office Excel Add-in for SQL Server Analysis Services (AS), and the Microsoft Office Business Scorecards Accelerator.

Microsoft’s BI offerings have piqued the interest of many vendors and industry watchers, including Current Analysis’ Mike Schiff, who speculated that the software giant might be testing the waters as an analytics applications vendor (http://www.esj.com/business_intelligence/article.asp?id=7128&t=y).

But according to Stewart McKie, an analyst with consultancy Ventana Research, not many people are asking a relatively obvious question: To what extent is the desktop productivity focus of Microsoft’s Office suite appropriate for the development and support of enterprise BI applications?

“[T]his BI approach is interesting because it points to an increasing awareness in Microsoft of the need to leverage the BI platform within Microsoft SQL Server,” McKie writes. “But these offerings are just a first step and while they deliver BI capabilities onto the desktop, they will not substantially impact an organization’s enterprise-wide BI strategy.”

This cuts to the core of a larger issue, says Ventana analyst Robert Kugel, who notes that even though Microsoft’s Excel spreadsheet is still the client tool of choice for many BI users, the software giant has done little to retrofit it for the realities of enterprise BI today. “It’s amazing that people spend gazillions of dollars on BI systems and then just end up dumping everything into Excel and doing the analysis there, because that’s where [the users] know how to do it,” he observes. “Since people like to work with Excel, what would be truly nice is if Microsoft would have provided people with the plumbing to get around the issues of what you get into when you use Excel in [distributed] environments.”

More to the point, writes Ventana’s McKie, Microsoft’s BI strategy “continues to look like it merely comprises a series of initiatives among Microsoft business units—in particular Office, SQL Server, and Microsoft Business Solutions.” While many users who lack existing BI toolsets, or are operating on a budget, or identify a pressing need for particular BI capabilities may avail themselves of Microsoft’s offerings, the choice isn’t so clear-cut for other companies that plan to bank on Microsoft’s burgeoning BI stack as a long-term platform.

“The question for end-users and Microsoft’s partners is which of these offerings to invest time and effort into or whether to simply ignore Microsoft BI for the moment and stick with BI vendors who at least are more focused on delivering a coherent BI offering,” he writes.

Most of the functionality Microsoft has thus far delivered is not new, of course, but its bargain-basement pricing (i.e., free of charge) gives the software giant and its SQL Server database a leg-up over established competitors. In this respect, says McKie, BI players such as Business Objects SA, Cognos Inc., Data Beacon, and Hyperion Solutions Corp. will continue to field comparatively more mature performance management offerings—but over time, Microsoft will close the gap.

“Microsoft Office is rapidly becoming a BI Trojan-horse as more BI capability is baked in and more desktops begin to use it simply because it’s there,” he points out. “So as these products are improved, they could eventually have an impact on the market simply because of the penetration of Office on corporate desktops.”

In the near-term, McKie says that Microsoft’s BI offerings may be a good bet for small- to medium-sized organizations—especially those operating on a budget. “The Office BI add-ins could be the means to pilot low-cost, low-commitment BI initiatives to explore ways to make more use of transactional data stored in SQL Server databases or to round out existing SharePoint portal investments,” he writes.

Large organizations, on the other hand, should evaluate Microsoft’s BI technologies against the offerings of the software giant’s more established competitors. “Companies should approach enterprise rollouts to more than workgroups of a few dozen users with caution as the scalability of these offerings has not been proven in larger deployments,” he concludes.