PerformancePoint At Last: Q&A With Microsoft's Alex Payne and Michael Smith

Sep 23, 2007 (01:09 PM EDT)

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In one of the most high-profile enterprise software product launches this year, Microsoft Office PerformancePoint Server 2007 was finally released to manufacturing on September 20. To hear more about what the platform delivers and get Microsoft's take on what critics and competitors are saying, Intelligent Enterprise sat down last week with Alex Payne, Director, Office Business Applications, and Michael Smith, Director of Marketing, Office Business Applications. Is this version 1.0 product ready for your enterprise? Two executives who helped guide development, packaging and pricing make the case for PerformancePoint.

Alex Payne

Michael Smith

PerformancePoint was previewed extensively at Microsoft's Business Intelligence Conference in May. Where there any notable revisions or upgrades leading up to final release?

Alex Payne (AP): We've had more than 10,000 participants in our community technology preview (CTP), which is what we call our beta program. That's very broad participation, and for the most part I'd say we've been responding to CTP feedback and working on fit, finish and performance rather than adding net-new functionality.

Can you recap the highlights of what PerformancePoint delivers?

AP: The three big areas are monitoring, analysis and planning. From the planning side, we're delivering planning, budgeting, forecasting and consolidation as well as management reporting including statutory- and GAAP-type reporting. On the analysis side, PerformancePoint delivers Web-based analytic functionality on top of the same models, and that's where a lot of the technology that came over from the ProClarity acquisition shines through. On the monitoring side there's scorecarding, dashboarding and reporting.

Some analysts say that as a version 1.0 product, PerformancePoint has a way to go in terms of supporting content. What does Microsoft provide in terms of best-practices guidelines, business process frameworks and so on?

Michael Smith (MS): We've done a lot with built-in business rules. We have rules for common things that people need to do like currency conversions. In financial consolidation we have rules for how you consolidate multiple general ledger types and partial ownerships. We also have business rules for approvals, workflow cycles and escalations that will make these applications a lot more functional for end users.

How does that compare with what veteran performance management vendors offer, particularly competitors such as Cognos as well as Oracle and Business Objects with their recent Hyperion and Cartesis acquisitions?

MS: When you look at core processes such as consolidation, we've provided quite a bit of functionality — certainly enough to handle the majority of customer needs. There will always be high-end boutiques. Cartesis, for example, really excelled in some of the European consolidation rules and accounting support, but we're going to be quite competitive out of the box, even in version 1.0.

AP: I'd point out that we're the first company to ship an integrated planning, monitoring and analytics solution. There have been a lot of things happening in the market through acquisitions in recent months, but the integration [among those vendors] ends at the price sheet. On a pure, feature-to-feature comparison on the planning side, I think we're on par [with the competition], but when you go beyond that, the market expects an integrated application, and that's what we're delivering.

Many of the established performance management vendors have already tackled finance and they're now moving into operational performance management. What do you have planned in that area?

AP: I have a two-pronged answer. First, PerformancePoint has capabilities for areas outside of finance. We had customers in our [beta] program that were doing production planning, revenue forecasting and other things that aren't in the pure financial domain. The modeling tools required are baked right into the application. Second, we do foresee partners coming out with their own [intellectual property] built on PerformancePoint. We also have plans for additional applications, but that's not something we're disclosing just yet.

MS: Once you address finance, which is one of the more complex challenges, moving to the next horizontal area of the enterprise, be it sales or manufacturing, tends to be easier.

Cognos made headlines recently with its planned Applix acquisition, and the Applix 64-bit, in-memory technology seems to offer an edge in speedy analysis. Does this represent the state of the art?

AP: I would argue that the state of the art is SQL Server Analysis Services. We run 64-bit, we've had the industry-leading OLAP engine for some time and we're growing much faster than the industry. The underlying multidimensional engine underneath PerformancePoint is Analysis Services. ProClarity was a rich visualization and analytic tool set that sat on top of Analysis Services. We brought that technology in house through the acquisition to gain functionality such as drilling across hierarchies, name sets and rich analytic functionality. That all shows up in PerformancePoint, but the underlying data source is still Analysis Services from SQL Server.

What about the in-memory technology for doing rapid, what-if analyses in near real time?

AP: We don’t have in-memory technology, similar to what Applix or QlikTech offers, in Analysis Services today, but I'm not convinced that's needed.

MS: You can still do rapid, what-if analyses in PerformancePoint; we just don't do it in memory. In finance, you're generally dealing with highly summarized, GL-level data and you don't necessarily need to have incredibly fast response time as you would in, say, a Wall Street portfolio analysis situation.

AP: There's an assumption that you need in-memory technology to do certain things, but we can meet most needs with Analysis Services with proactive caching and real-time OLAP. I'm not saying that in-memory is not an interesting technology or that we're not looking at, but Analysis Services is very capable today.

Microsoft is betting on the appeal of the integrations between PerformancePoint and the Office 2007 System, but how does the product stack up if an enterprise hasn't moved to Office 2007?

MS: PeformancePoint does not require Office 2007. From the planning aspect, there's no functional difference between planning in Excel 2003 and Excel 2007. What you miss out on are some of the net-new BI features in the Office 2007 system – richer visualizations, some of the native connections to back-end sources and the ribbon interface.

AP: And for Web-based analysis, you don't need Office 2007 at all. You can get all the Web-based analysis using the free version of Sharepoint that shows up in Windows Server 2003, so you can do cross-drills within a hierarchy or look at spark lines, bar comparisons or other visualizations.

Established BI vendors often assert Microsoft BI and PerformancePoint won't stack up in heterogeneous environments in which there are multiple data sources and non-Microsoft delivery options such as RIM Blackberries. How do your respond?

AP: I think those competitor statements are often based on ignorance because they don't yet understand what PerformancePoint offers. We don't really care where the data comes from. If it's in Oracle, fine. If it's in a Web service, fine. If it's in DB2 sitting beneath an application, fine. We use the SQL Server platform for going and getting the data, wherever it is, using things like SQL Server Integration Services, which is built primarily for a heterogeneous environment, so that's not really going to be an issue. On different delivery mechanisms, we focused on Web-based delivery and surfacing the functionality right inside the Office user interface. Do we have every corner case covered? Maybe not, but we definitely have the lion's share of where people work and collaborate on a day-to-day basis.

The early adopters we've talked to, such as Energizer and Skanska, tend to be Microsoft shops without a lot of diversity. Do you see that changing?

MS: What you're seeing in the early adopter customers is that PeformancePoint provides tremendous value as an extension of existing investments in Microsoft BI technology and other Microsoft products. Those companies will gravitate first. What you're going to start to see this fall is many more of the larger, heterogeneous enterprises start to adopt this technology as they get to try it out and put it through its paces. For example, we've worked on a couple of opportunities in recent months with some of the largest telcos in the world that are talking about deploying tens of thousands of seats. These are companies that have one of everything because they've consolidated over time, and you'll be seeing these sorts of proof points in the months to come.

There's been some press that PerformancePoint won't really be complete until the release of SQL Server 2008. Any clarifications on that?

AP: There was some misinformation that PerformancePoint won't really shine without SQL Server 2008, but that's fundamentally wrong. The version of PerformancePoint announced this week was built for and requires SQL Server 2005. In SQL Server 2008, yes, there will be new BI and data warehousing functionality — a lot of functionality in the core engine itself and inside Analysis Services and Reporting Services. When that product is released next year, we'll come out with service packs that will allow PerformancePoint to take advantage of the new functionality.

What will be the biggest advances with the release of SQL Server 2008?

AP: I'd say that will be in the area of pure data warehousing, with features like intra-partition parallelism, higher data scales, indexing around partitions and other improvements for scalability, performance and data warehousing workloads. We're going after the 40- and 50-terabyte data warehouses.

Any other misconceptions you'd like to clear up?

AP: Some people misunderstand the functionality that comes with PerformancePoint. It's what we were talking about earlier — planning, budgeting, forecasting specifically for the finance office. We've published three case studies already, and Microsoft itself has been using PerformancePoint for forecasting and planning in house for more than two years. There's a lot more content there specifically for finance than the competition wants to give us credit for.

The other point I'd stress is that it's integrated from a monitoring, analysis and planning perspective. If you build your plans, your cubes are better, your scorecards are better your analysis is better because of the rich data model that comes from the planning exercise. Models are essentially rendered as underlying Analysis Services cubes. Our scorecards are built on top of those cubes. When you do analysis, either in Excel or in the browser, you're slicing, dicing and cross-drilling against those same cubes…

Finally, we have priced PerformancePoint for broad deployment at $20,000 per server and $195 per client access license, and we've included a lot in that license. You don't have to pay extra to do scorecarding. You don't have to pay extra to extend analysis capabilities out to line managers. With that one license, you can do planning, scorecarding, analysis, reporting — everything in PerformancePoint. As a result, customers like Energizer are giving it to more people, and we've priced it so customers can spread access to tens of thousands of users.