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Microsoft plugs self-inflicted planning gap

Madan Sheina

Microsoft plugs self-inflicted planning gap

Microsoft is offering an integration of its Office and SQL Server based business intelligence (BI) tools with SAP BusinessObjects' Planning and Consolidation (P&C) application. This is billed as a 'preferred' solution but also carries a joint marketing agreement. We believe it will be warmly welcomed by users on both sides. Microsoft BI users get a route into performance management. SAP P&C customers get the assurance of continued support for Microsoft platforms. Better still, SAP gets a foothold in Microsoft BI accounts as well.

SAP BusinessObjects was an obvious planning partner for Microsoft

This announcement shouldn't come as a surprise for two reasons. Firstly Microsoft announced in January that it was pulling the plug on the planning module of its PerformancePoint Server 2007 offering. PerformancePoint, which was built on an amalgamation of technologies from Microsoft's Business Scorecard Manager and ProClarity acquisition, had sluggish uptake among customers. Secondly, SAP P&C is the product formerly developed by OutlookSoft (which SAP acquired in May 2007) and has a distinct Microsoft flavour; an Excel-based front-end user interface designed to run against a back-end of SQL Server's Analysis Services multidimensional database. Most other planning products come with their own multidimensional databases.

Add the two together and it's no surprise that Microsoft is now recommending SAP as its preferred business planning partner. SAP will benefit in two ways - accelerated adoption of P&C software and a firmer foothold among the Microsoft user base, which represents a nascent market for mid-market planning and enterprise performance management (EPM) solutions. Microsoft meanwhile fills a white space in its BI portfolio - namely EPM, an area that it never really fulfilled with PerformancePoint Server. Microsoft lacked the methodology or consulting expertise on how to implement it properly, leaving organisations to their own devices. Microsoft has since thrown the code to third-party developers and partners to fill the gaps - though has fallen short of making it open source.

This move will be a relief to SAP P&C customers

Users of the SAP P&C software - both legacy OutlookSoft or newly signed customers - will be glad. This partnership is important enough for SAP to keep alive - both technically and commercially. Hence SAP Planning and Consolidation customers will be ensured continued support for Microsoft environments for the foreseeable future at least. Some customers in particular might have been concerned about SAP's moves to beef up the application's support for the NetWeaver environment.

SAP also claims that it currently has more than 1,500 customers for P&C, but that base is growing due to its Excel-centricity and disciplined way of taming the proliferation of disconnected 'spreadmarts' for enterprise budgeting and planning tasks. SAP is also keen to tie into Microsoft's Office desktop to make its own customers more productive - an initiative started in 2006 as 'Duet', which allows SAP application users to access (and analyse) data by linking processes into Microsoft's Office suite

This is clearly a competitive play against Oracle

Even though both SAP and Microsoft compete against one another in BI, they share a much bigger enemy in Oracle. Oracle, which has Hyperion Solutions under its wing, is the 900lb gorilla in EPM - at least of the financial kind.

This partnership is a shot across the bow of Oracle. But is it a portent to a merger between SAP and Microsoft down the line? This isn't the first time the two companies have joined forces and collaborated over integration between their respective environments to make their programs work better together - Duet, for example. We believe that the integration between SQL Server BI will add further impetus to Duet's value proposition.

The ability to do joint marketing and make joint sales calls is one thing. But the fact is - from a platform perspective at least - SAP is aggressively pursuing the planning, budgeting and consolidation market. Microsoft wants to as well, but at a mid-market level. Hence both stand to benefit from this integration - SAP in particular, by giving the company a foothold in Microsoft accounts. The key of course is pricing - many Microsoft BI accounts are about lowering the cost of ownership.

But there's a flip side to consider. A great deal of SAP software runs on Unix and IBM mainframe systems. A Microsoft Windows-based system might therefore run counter-clockwise to that.

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