In-Depth

It’s (Finally) Official: Microsoft To Acquire ProClarity

On the heels of Oracle’s BI Suite announcement, Microsoft shores up its analytic chops by acquiring long-time partner, ProClarity.

• By Eric Kavanagh
• 04/05/2006

The rumor circulated through a business intelligence consultancy’s headquarters in Austin, Texas. A software powerhouse was reportedly angling at an acquisition of a close partner—it was just a matter of when.

That rumor circulated half a decade ago… way back in 2001. How time flies.

Two days after April Fools, 2006, Redmond-based Microsoft Corp. announced its intent to acquire longtime partner ProClarity. The move will likely send shockwaves through the greater BI user-dom; or at least into the halls of BI’s recognized platform plays, including Business Objects SA, Hyperion Solutions, Cognos Inc. and Microstrategy. Big Blue and Larry Ellison’s crew are surely paying attention as well.

The upshot, most industry watchers seem to think, is that the gloves have officially come off; and the collegial partner ecosystem of the recent past, now seems as distant as the football games of other colleges (to quote Ernest Hemmingway, in A Farewell to Arms).

Repainting the Vendor Landscape

Philip Russom, senior manager of research and services at TDWI, notes that this time, the competition to BI platform players is real. In an e-mail to BI This Week, Russom pointed out three 2004 developments that set the stage for Microsoft’s entrée into the full-blown world of BI: the first release of Reporting Services for SQL Server 2000, the first release of Report Designer for Visual Studio .NET, and the acquisition of “Lilliputian” software vendor ActiveViews.

Says Russom, “Reporting Services, Report Designer, and ActiveViews were only slight threats to other vendors. But now Microsoft has a product that has a chance against larger BI platforms, so vendors of those platforms cannot help but see Microsoft as a competitor. Expect to see more deterioration in dwindling partnerships between Microsoft and leading BI vendors. Even so, ‘co-opetition’ must continue, since BI vendors still have to support SQL Server and its many BI and data warehousing functions. And Microsoft must continue to roll out more BI/DW functions, which all tools leverage.”

Industry pundit Mike Schiff of MAS Strategies says the acquisition makes sense, though he questioned the timing. “I’m surprised it took this long; every time Microsoft called to brief me about an acquisition, I always asked if it were finally acquiring ProClarity!”

Schiff, a veteran BI analyst, continued: “ProClarity has been a loyal Microsoft supporter for many years, ever since it abandoned its former proprietary database in favor of Microsoft SQL Server, in particular SQL Server Analysis Services. Although ProClarity made some noise about working with database vendors when Microsoft acquired ActiveViews (a marginal competitor to ProClarity) in April 2004, this was an idle threat. Given the two companies’ strong and mutually rewarding partnership, the acquisition makes perfect sense and was long overdue, especially as Microsoft acquired Maximal, a ProClarity partner, in June of 2001.”

Cindi Howson, author of BISorecard.com, had this to say: “I think it's great for Microsoft and for their customers and a very strong signal that they are serious about the BI Market.”

Alex Payne, Group Product Manager in the Office Business Applications Group for Microsoft, offered some commentary about the partnership issue: “Quite honestly, we look at unmet needs from our customer base, and when we provide solutions to those customers, it’s almost always a combination of Microsoft and a partner.”

On the ProClarity move in particular, Payne said: “This is great news for those partners that choose to extend and partner with us... but if your sole job is to compete with Microsoft, you’re not liking this news too much.”

On the issue of a service-oriented architecture (SOA) and Web services: “When you look at all functionality... Reporting Services is a Web Service, Analysis Services is a Web Service, the database itself is a Web Service.” Well done there.

And on master data management (MDM), the discipline du jour: “I won’t comment on where we’re going; but watch this space for Microsoft.” Well done indeed!

Reading Between the Lines

An analysis of Microsoft's official announcement yields insight into where the company plans to go in the broadening world of BI (TDWI’s comments in parentheses):

“Microsoft’s BI strategy aims to broaden the reach of business intelligence by providing an easy and integrated user experience for accessing and working with business information so that decision-makers at all levels in an organization can make more informed decisions and drive better performance.” (That 44-word sentence is code language for an ease-of-use sell associated with the upcoming release of Microsoft’s new Office Suite. A critical mass of end users have Microsoft Office already installed, and Redmond’s newly enhanced BI chops can be easily delivered via that well-known front-end. NB: the words "integrated" and "performance.")

“The goal is to reach every individual, add value to every decision, and help organizations align people and initiatives to business strategy." (Here, the message brokers of Microsoft make clear the company's intention to dominate the BI landscape, in particular the lucrative and largely untapped small and mid-sized business (SMB) market. Note also a thematic allusion to that prophetic prediction of years gone by, when Bill Gates foretold a PC on every desktop. And the presence of the words "align" and "strategy" in the same sentence certainly smacks of Microsoft's new Business Scorecard Manager.)

“ProClarity’s technology and people will help accelerate Microsoft’s business intelligence strategy, provide increased BI functionality, increase customer value and enhance opportunities for industry partners to integrate BI into business applications.” (The term “accelerate” stands out: In essence, Microsoft is using a euphemism: acquiring ProClarity amounts to putting their pedal to the metal. The comment about enhancing opportunities for partners to integrate BI is likely a double-entendre: partners on the application side can focus on weaving operational BI into their software; while traditional BI “partners” such as the platform plays... well, as Russom pointed out, they’ll surely need to support SQL Server, won’t they? Standard Oil’s Rockefeller would doubtless be impressed.)

A quote from the official announcement provides the party line: “ProClarity has been a valued Microsoft partner for many years, with a strong R&D organization, more than 1,200 mutual customers and a sales force that already works closely with ours,” said Jeff Raikes, president of the Business Division at Microsoft. “This acquisition advances our BI strategy and our ability to deliver performance management applications to customers.” (Note that reference to performance management. Howard Dresner, of Gartner fame, now on board with Hyperion, says that business performance management (BPM) is “BI with a purpose.” And the purpose of that quote is clear: Redmond knows where it’s going, and, to quote a fairly recent Bond flick, “The World Is Not Enough”!)