Microsoft's Business Intelligence Challenge

Dynamics partners can play a role in shifting Microsoft's BI strategy from tools to applications.

Microsoft's future success in business intelligence (BI) is facing a major obstacle: the company's own definition of business intelligence. It's a definition rooted in a tool-centric approach, and it's one that has served Microsoft well for years. But the time has come for Microsoft to think about a new definition of BI, and Microsoft's Dynamics partners and other applications vendors are well positioned to help Microsoft successfully manage this shift.

What's wrong with Microsoft's position in the BI market was summarized by Microsoft BI General Manager Bill Baker last spring. Baker told industry analysts gathered at the company's first BI conference about his visit to a client running a large SQL Server data warehouse. Baker wanted to know how many users the data warehouse had. The answer was two: The CEO and the database administrator who ran this multimillion dollar white elephant.

That disconnect between the tools' capabilities and the real world was highlighted later in the day, when a hand-picked group of Microsoft customers discussed their inability to engage Microsoft -- and many of its BI-tools partners -- in a dialogue about strategic issues relevant to these customers' businesses. It was clear that a tools-centric approach wasn't helping Microsoft help its customers tackle the genuinely complex analytical requirements of their companies.

The problem is one that bedevils the entire BI market, and in that regard Microsoft is hardly alone. This tools-centric -- as opposed to applications-centric -- approach to BI fosters a "build it and they will come" mentality that too often yields unwieldy solutions and dissatisfied customers.

It doesn't have to be that way. There's a large body of applications, based on Microsoft's core BI platform, which delivers highly valuable analysis specific to given industries and is developed by domain experts who, without a doubt, could have that strategic dialogue that Microsoft's users crave.

Some of them can be found, without too much difficulty, by perusing the Dynamics Solution Finder on the Microsoft Web site. Type in "exception management" and select "manufacturing" as a vertical industry and you'll quickly find Gold Certified Dynamics partners like RockySoft Corp. of Fort Collins, Colo., and DQ Technologies Inc. of Cedar Park, Texas. These companies are building applications that track exceptions in manufacturing supply chains and in the delivery of manufacturing orders, two rather specific examples of the kind of packaged BI solutions that Microsoft's team would do well to promote.

There are other examples outside the Dynamics partner environment -- enterprise-applications vendors like Accruent Inc. in Santa Monica, Calif., and New Momentum LLC, in San Clemente, Calif., have built vertical applications for real-estate management and electronics supply chain risk-management, respectively, that also deliver packaged BI and are based solidly on Microsoft's BI technology. These companies walk the walk and talk the talk when it comes to true BI in their respective industries, and their customers know it.

How hard would it be for Microsoft to make this shift? It would first take a major change in how the company defines BI, one that would put its solutions partners in the forefront of its efforts and relegate tools like SQL Server, PerformancePoint and SharePoint to the background. This may sound almost heretical, but it's more in line with what customers are really looking for than the pure tools approach that Microsoft's currently pursuing.

Tools are to BI the way hardware stores are to home ownership. Most of us don't head down to the hardware store, load up on a few hundred thousand dollars worth of lumber, nails and paint, and then go to an empty lot and start building a house. It's more rational, useful, cost-effective and ultimately satisfying to call a real-estate agent and buy that dream house "out of the box."

Similarly, Microsoft should look at BI as largely an "out-of-the-box" solution. The bad news is that this goes against so much of Microsoft's heritage as a technology company. The good news is that the company's partners are already thinking this way -- even if Microsoft can't.

About the Author

Joshua Greenbaum ( is founder and principal of Berkeley, Calif.-based Enterprise Applications Consulting.