Analytics Powers Soft-Pedal Microsoft Realtime Reporting Threat

Microsoft partners expect the company to start beta testing what will be an aggressively priced Office Realtime Reporting Server later this year. Microsoft would not comment on the server, code-named Maestro.

Common sense dictates that Maestro will bring price pressure to bear on Business Objects, Cognos, MicroStrategy and others. These companies field full-functioned -- and typically pricey -- realtime reporting that taps into data warehouses and live operational data.

"Once you get into enterprise realtime reporting, the cost gets to six figures, easy," said one East Coast source familiar with Microsoft's plan.

Some rivals shrugged off the threat. "Our bread and butter is in enterprise and large midmarket [companies]. End users will not start writing their own BI dashboards," said one executive, who asked not to be named, with Ottawa-based Cognos.

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Not every agrees. Microsoft and others believe that end users will write -- or at least create -- their own reports and dashboards.

"The holy grail for 20 years has been to get ad hoc reporting into the hands of the person requesting the report, not some specialist," said Andrew Brust, chief of new technology for Citigate Hudson a New York-based solution provider. The inclusion of ActiveViews reporting in the latest beta of SQL Server 2005 is an example of that.

Sources said Maestro will build on current technologies that include SQL Server reporting and notification services as well as updated score carding from the Office group. The goal is indeed to tap into popular back-office applications like SAP enterprise resource planning (ERP) and PeopleSoft human resources management applications.

A Business Objects executive said his company can preserve its leadership position by linking to all data types, including Enterprise Java Beans and Microsoft Active Data Objects, as well as the standard applications and data repositories.

"We're in the business of reporting live data from operational systems. If someone is going to use a product as a reporting standard across the enterprise, not all that data may come from a data warehouse or even a database," said Lance Walter, vice president of product marketing of the San Jose-based company.

It has become common practice for software companies to welcome Microsoft's entry into their field by saying its presence validates their own strategies. The vendors that have said words along those lines include WordPerfect, Lotus Development and Netscape Communications. None still exists as an independent entity. Microsoft ended up with the meat of their markets.

But these BI vendors say it will be different this time. They maintain it typically takes Microsoft two or three tries to get new products right. "The problem with that argument is Microsoft has $30 billion dollars to get it right," says Jeff Matthews, general partner at Ram Partners, a Greenwich, Conn., hedge fund. Microsoft has "validated a lot of companies right out of existence," he said.

SPSS said Microsoft's ability to funnel more realtime data to other systems will help its business, which it characterizes as predictive analytics vs. core analytics.

"It's a wash for us. The distribution of critical information is made easier when people add value to the backend content. We're buoyed by that," said Dyke Hensen, senior vice president of the Chicago-based company.

"If we're in a contact center and someone calls, we'll quickly surface info based on our modeling. Is this a great customer, a customer at risk? What's the retention issue -- and score it. Then before we make an offer, we determine if they're a credit risk. This is a combination of transactional time polls and modeling and segmentation," he said. "When people tap into realtime data, that serves us well."

Partners on the Microsoft side of the aisle are somewhat skeptical of such claims. If, as expected, Microsoft offers realtime links to just the most popular backend systems, it still will give enterprises leverage against their current vendors, they said. "Microsoft will blow the lid off this," said one mid-Atlantic partner.

But Brust cautioned that the pricing differential between Microsoft and non-Microsoft offerings may not be so clear cut. "One of the reasons [Microsoft] reporting services has been so successful is that the licensing for [Business Objects] Crystal Reports gets pretty expensive once you go beyond a small workgroup. However, even Microsoft reporting services licensing gets interesting. Right now you are only licensed to use it on the same box as SQL Server itself. If you want to distribute it, you need to pay for SQL Server on each box," Brust said.

He and others maintained that volume licensing in big companies remains a mystery because so many vendors go off the price list. "Once you get to enterprise licensing, it's almost like it's mobbed up. Here's the price, but I like your face, so I'll give it to you for this discount, just don't tell," he said.

Whatever Microsoft ends up doing, realtime reporting remains a huge area of interest as companies seek to get a better picture of their inventories, their sales and other key data in time to act upon it productively.

"This is an interesting move [by Microsoft] because it would build atop Microsoft's enormous push for realtime anything with Live Communications Server and messaging," said Melanie Turek, vice president of Nemertes Research, Chicago. "I truly believe realtime data is very, very important and, as more people have instant messaging and can talk to each other right now, they'll start wondering why they can't get their data right now. This need for realtime data [distribution] will only grow."

Pat Langowski, director of strategic business for Tectura Northwest, a Seattle-based Microsoft partner concurred. "The first phase was to build the ERP system -- then you have a great big data jail. The second phase is getting that info out. But reporting is still tough. It's hard to understand the table structures and data. If you can get to a BI scenario that lets you just drill down into a map, or point an Excel spreadsheet at a [data] cube, that would be very valuable. And making that realtime data would be even more so."

As for the argument that Microsoft is late to the realtime reporting party, the mid-Atlantic solution provider scoffed. Microsoft comes in after it has studied market requirements and the competition. "It's like how they plan sidewalks in Princeton. They wait to see where the grass gets worn, then start paving," he said.

But Microsoft not only starts paving -- it also cuts prices, he said.