News

Microsoft Acquires Portfolio Management Firm

• By Stuart J. Johnston
• January 19, 2006

Microsoft expects to combine UMT’s technology and expertise with its own Office Enterprise Project Management (EPM) solution, which is built on Office Project Professional 2003 and Office Project Server 2003.

UMT is a project and portfolio management software and consulting firm that helps companies create, manage and optimize project, application, product and process portfolios.

Portfolio management software helps organizations strategically create, manage and optimize project, application, product and process portfolios. “The UMT acquisition will help Microsoft address these scenarios through an end-to-end, integrated project and portfolio management solution that helps enable both excellence in project execution and better decision-making in prioritizing and funding those projects,” said a Microsoft statement. The two companies first announced the then-pending deal in mid-December.

UMT’s integrates Microsoft’s Office Enterprise Project Management solution with UMT’s leading Portfolio Management solution using the UMT Microsoft Project Server Gateway.

Now that the transaction is completed, some members of the UMT executive team and a number of UMT product development employees will join the Microsoft Office Project team. The consulting arm of UMT will remain a separate entity and become the UMT Consulting Group to help provide successful implementations of the Microsoft portfolio management software platform.

“With UMT’s technology and portfolio framework, we will extend the Office EPM Solution to offer an end-to-end enterprise project and portfolio management solution,” said Chris Capossela, corporate vice president of the Information Worker Product Management Group at Microsoft, in a statement when the deal was first announced. “Through the acquisition, we will be able to more quickly deliver on our vision of bringing project and portfolio management capabilities to all levels of an organization.”

In addition to PPM, UMT will provide consulting services in the areas of application portfolio management enterprise project management and project management office engagements.

Analysts were generally buoyed by the deal.

“Microsoft's plan to acquire UMT's portfolio management software assets will bring innovative analytic techniques into the mainstream and put pressure on rival vendors of narrowly targeted portfolio analysis solutions,” according to a brief analysis by Gartner.

“The acquisition . . . should extend Microsoft Project's ability to effectively target IT project and portfolio management customers in particular as well as the enterprise PPM market in general,” according to IDC.

But Microsoft’s expansion into more and more vertical niches also threatens to put pressure on all of the small players, particularly consultants, who have safely occupied that market space to date.

“Microsoft’s UMT acquisition will alter the portfolio management landscape . . . the impact will be large in the market as Microsoft applies its volume model to this space,” according to an analysis by AMR Research.

“While we successfully developed and commercialized the UMT Portfolio Manager software suite acquired today by Microsoft, our core competency has always been delivering the process design and governance consulting methodologies essential to successful portfolio management adoption," said Gil Makleff, CEO of UMT North America, in a statement Thursday.