BI vs. Performance Management - Ground Hog Day

The circular debate of business intelligence Vs. performance management is noted by Jonathan Becher in his blog. He has incorporated a handy reference chart on the differences in case anyone is still not clear. Of note is that he did not incorporate the industry standard wheel diagram used by most vendors and analysts. He also makes an interesting and important distinction that performance management includes the requirement to "motivate" in front of monitoring, management and measurement. This is important and often does not get the attention it deserves. Performance is tied to motivation - as in take home pay. Not on a better looking dashboard or more financial analytics wrapped in BI.

Greetings from Berlin!

I'm tempted to do a whole ich bein ein thing, but will refrain. The Business Objects European Insight Conference kicked off this morning with dual news, some close to my performance management heart, namely the Performance Suite release which features the integration of the profitability applications on the business intelligence platform ahead of schedule. The other bigger news involves an acquisition of Inxight Software, which is the first attempt to marry the elusive bridemaid of unstructured data to the BI platform.

While this has real, yet tangential benefits to the current EPM marketplace, it's a bold move to address all the data not currently residing in data warehouses these days. More to come on this, and I look forward to comments on this move from my fellow performance guys. I'm itching for a good blog fight--maybe it's me being back in the fatherland again...

Do Not Pass Go - Do Not Sell Data Integration

Business Objects was sent to the penalty box with a 5 minute major and permanent injunction for violating an Informatica patent regarding its ETL technology. Infoworld makes note of it here. Business Objects claims this is a non-issue and has already released an updated version with no patent issues. However, do not be surprised if this comes back up at earnings time due to dollars, perception and distraction.

And the make the most of this issue, Informatica issued a news release, but also issued a migration credit for customers who want to change out of their Business Objects Data Integrator. Not only do you get a credit, but you also get two free passed to Informatica World user conference. It is not immediately clear if a box lunch and a tee shirt are included, but it is safe to assume yes.

Dilbert gets into the Performance Management Game!

Depending on how this arc plays out in the next few days, I'm more than happy to take credit for Scott Adams' new found interest in business intelligence and performance management in this week's Dilbert strip. Scott was the keynote speaker at the Business Objects EPM Insight Conference this past March in Orlando, and was a huge hit.

Little did I know that all those sales brochures and data sheets we sent him to prep him for his talk would become fodder for the next project from the pointy haired boss--I guess he really was paying attention during our briefing!

Was OutlookSoft the Best Choice for SAP?

No, I'm not on my high horse again on this one, whatever a high horse actually is (note: my interpretation on the left). But Doug Henschen pretty much mirrors my earlier thoughts in his Intelligent Enterprise article on the acquisition. Nice money quote at the end which pretty much sums it up:

"...it's clear to me that the early movers gain the best advantage by not only setting the trend but also by picking the best acquisition targets to fit the new strategy. Outlooksoft wasn't the best choice for SAP, but it was the best option still available."

Read it here for yourself and be impressed.

How you like me NOW?

As the software industry moves into the cloud, so does the next generation of BI software. A good example of this is a recent announcement from Cognos around their new SaaS (Software as a Service) offering labeled Cognos Now. The hosted service offers dashboards, integrated data, analysis and reports as a packaged BI service they are calling a "BI appliance." The recent acquisition of dashboard specialist Celequest provides the technology base for the on demand business. In their press release they claim to be the industry first to market an on-demand BI service… ummm, right. All "appliances" aside, this is the next evolution of the BI industry, you can almost hear the mouths of mid-market customers salivating. How will this impact the some of the other BI players, might we see more come from Business Objects with their crystalreports.com hosted offering, might we?

BI Equals Better Operating Margin

Great case study on Dick's sporting goods today in CIO Insight and how they used BI to improve their operating margin and improve inventory management. The case study is great PR for Microstrategy and manages to call out a lack of performance by Cognos and Business Objects in sales campaigns and in deployment. All good PR types and the vendors they work for crave this kind of huge PR win.

Even better for end users of BI and performance management is that the connection to operational improvement and margin is spelled out in black and white. The business of business intelligence would take off in a big hurry if everyone could show the same direction connection between the data you have and business results. Showing a straightline from BI to improved operating margin would decrease meetings and free up budget in a big hurry.

Business Intelligence and BPM - Looking for a Clue

Clint Boulton wrote an interesting take on the intersection of BI and BPM for Datamation where he explores the ramifications of the Tibco's announcement of the purchase of Spotfire. I commented on this in a earlier post. Boulton describes this as a "head scratcher" but then does a nice job of finding some other people to comment on what it means for BI and BPM, and where the market might move. His summary - more intelligent business process capabilities.

I think the article provides a good perspective on what is happening in the market and how BI and BPM might work together as well as where the market is heading. I find it interesting that he notes that "leaders" in the market include IBM, BEA, Tibco and Software AG. Maybe true if you approach BPM as an integration issue, not a people, process or strategy issue. Not completely incorrect, but this is kind of like judging BI vendors by their data integration capability. While this is a key part of the puzzle, it is a lot like deciding to build a house. When you decide to break ground for your new home, the first person you call is not the plumber.

Boulton's article also illustrates gaps in understanding of the intersection of BI, BPM and performance management by analysts like Mark Smith of Ventana. Smith comments

"Most corporations weren't built on business processes...the challenge with process management is that it makes good common business sense, but most corporations aren't designed or managed by process, right? It's not because they're doing the wrong thing, it's because companies aren't mature enough to manage their business by process."

What?

Last time I checked, ERP was all about how to capture, automate and replicate key business process. Anyone been to an ERP or supply chain conference in the last 15 years? Maybe you might have heard of business process engineering - armies of consultants documenting business processes in the 80's and 90's. How about the holy trinity of performance management: Kaplan, Norton and Jack Welch.

BSC and Six Sigma are process methodologies designed to improve performance. This may help explain to Smith why BI, BPM and platform vendors spend so much time and money to offer BSC dashboards and scorecards, Six Sigma graphing tools, strategy maps, and ABC costing options for their finance analytics, Total Quality Management frameworks, and more. Regardless of size of company, I have yet to meet any company of any size where senior executives cannot explain their quote to cash process.

I am not sure if Smith's comment implies that companies are actually managed via Excel, planning and ad-hoc reporting, or if he truly believes companies are not mature enough to understand and manage process. If that is true, how in the hell did all the ERP, CRM, PLM, MRP and analytics get sold over the last 30 years? And why is process so important to so many people? Jack Welch or not, Smith's comment displays a clear lack of understanding of the issues and the market.

It is not clear if Tibco's move is a single data point or an early indicator of more BI and BPM intermingling. Regardless, more analytics linked to business process is likely a good thing, and I think most of us are mature enough to handle it.

BI Vegas Line: Place Your Bets

Check out this take on some of the recent BI action and interesting speculation on changes to come. There is some good insight into the path Business Objects and Microsoft will move towards and more speculation on IBM picking up Cognos. Who's next...? The table is open for bets.

More Reaction in the Webosphere to the Business Objects Move...

Trying to get some cross-posting out the door before I head out the door, but the Butler Group chimes in on the Business Objects/Cartesis move.

Only bone of contention I can see in the article is the characterization of the move as a "knee jerk" reaction. Anyone who knows how these things works knows that they don't just appear overnight. Well OK they do sometimes, but most often companies are dancing around with several partners before settling on a date for the evening, if you know what I mean. And in this case, there was a lot of mutual eyeballing from across the room for some time between these two French beauties, so it was hardly a case of "oh know, the dance is ending and I don't have a partner."

Oh wait, we're talking about Business Objects, not SAP...

Kidding! I kid--

The CIO Blog has Questions on Hyperion and Oracle as Well...

I'm sure many vendors out there would love to know the answers...

Cannonball!

Talk about making a splash! The halls of the Seattle convention center were filled with BI hopefuls, Starbucks coffee in hand they searched for answers to their business challenges. Whether it was the buzz of the java or all the recent market news, there was certainly much ado at Microsoft’s BI coming out party. To add a little special sauce to Guy’s post, Steve Ballmer actually addressed the question of market consolidation in his keynote this morning. His answer was less BI specific and more a stance on big picture software moves in general. He stated that there will always be a few big companies, a second level of middle tier players, and a whole bunch of smaller companies. Some of those smaller players will rise up others will be acquired and new technologies will form. That aside, there was certainly a lot of chatter around Microsoft entering BI as a game changing event and the pressures it’s put on some of the other competitors and how the middle tier Ballmer spoke to must continue to innovate, acquire new technology and re-define the strategy as the cycle continues to stay competitive, all pointing to more changes to come.

Timing was also a keen topic of interest, by that I mean the timing of technology, market awareness and customer maturity. If I had a nickel for every time in the past two days I heard, “What took you guys so long to host a BI conference?” well I’d probably have a couple of bucks but you get the point. The timing around market readiness and overall appetite for performance management has certainly evolved. I can’t help but look back three years ago, at the time I was at Business Objects listening to analysts tell us that we were ahead of market in the performance management applications business. Although it’s probably a bit too early to say as the conference just ended but I will say it any ways, the BI conference was a historical event as it is the starting point for the beginning of a complete year of BI activity where Microsoft will release the first version of PerformancePoint Server and the next release of SQL Server. All of this activity builds momentum that the market is forced to react against and you either lead, follow or get out of the way as our old buddy James Thomas would say. Guy’s comment on something happening in the next six months to shift the market once again is also a fair one. You’ll likely see other big players like IBM and HP show their hands as they step into the game. For all those interested in seeing some of the content from the conference it was all recorded and will be posted online, I’ll post a link when it’s available. From the conference showroom floor this is Performance Guy Nic signing off.

All Hail Microsoft’s Formal Entrance into the Land of Performance Management!

So while Performance Guy Nic is busy prowling the halls of the Seattle Convention Center this week at the first ever Microsoft BI Conference, it occurs to me that it’s a great opportunity to take a look at the impact of Microsoft on the performance management market.

To be sure, they are a formidable force in any market they enter. Their resources and patience are bottomless, and they are not afraid of refining a strategy many times over.

But the BI and performance management market has changed significantly since they first announced this initiative over 18 months ago. Then, if you look at the reactions from the analysts and press, it was a matter of time before they took over the space, and the vendors were all put on their guard—deals were frozen, partners were summoned, developer resources marshaled.

So what’s different now? Well, the market is, for one. The market now, given the rapid consolidation we’ve seen just in the last month, means that other vendors are in a far stronger position to compete against Microsoft than they were a few years ago.

Also, the maturity of the market is different. While at the time positioned strongly as both an enterprise and mid-market play, given the rich features and functionality of other offerings in the market, it’s going to get mighty crowded up in the Fortune 1000 for a non-business oriented sales manager. Which leaves the mid-market, which is where the analysts think this will probably gain the most traction early on, especially as the planning and budgeting capabilities of the performance point products take time to catch up to what’s on the market today.

Also, given that we’re still about 6 months or so away from the launch, who’s to say what else will happen in the market that may further marginalize this offering.

Or are we about to see the unveiling of a performance management juggernaut that will lay waste to the EPM landscape. Let’s ask our roving Microsoft correspondent Nic Smith—over to you, Nic…

More News on SAP and Outlooksoft

Cross posting blog fever--catch it!

http://www.ebizq.net/blogs/archives/2007/05/vendor_chatter_2.php

Cognos and IBM?

This one's been floating around for awhile, but this is the first time I've seen it in print. Posted without comment...

Hold on a Minute...

Interestingly, the market doesn't seem to agree with Mr. Morrissey's analysis of the situation. Although Business Objects certainly has quite a good stable of consolidations customers in the marketplace, it's been no secret that the global GAAP heavy duty reporting and consolidations functionality has been lacking in its product arsenal, and Cartesis, with it's almost exclusive stable of enterprise customers, clearly fills this aspect of the product portfolio.

If you look at the move by Oracle, they made no bones about the fact that the rationale for the acquisition was clearly to move into the CFO office and stake a claim to turf previously held by SAP. I'd strongly argue that the move by Business Objects provides it with a clear path to the same audience that was previously lacking before on a consistent basis. Planning overlap aside (which although not insigificant, was clearly not the rationale behind the deal and the Cartesis planning product is by no means a market leader), you can make a strong case that the end to end functionality of the BusinessObject EPM stack is now much stronger and more complete as a result of this acquisition. I just don't know if you can make the same case for SAP, which was my point. It's a lot to pay for something that isn't readily apparent to the marketplace.

By their own admission, they were caught flat footed by the Oracle announcement, and by all accounts things are more than a little unsettled in Palo Alto in terms of the GTM strategy. Now will it turn out to be a good thing for SAP? Who knows. It could be. But it's a lot to pay to bring in functionality that you already have in full.

Anyone for tea? I'm thirsty and there appears to be a kettle brewing on our blog...

Pot Calling Kettle - Let's Make a Deal

I would post this as a comment, but after the aggressive and amusing take by Guy regarding the SAP / Outlooksoft deal, I have to move this back to page 1. While I can't disagree with his perspective regarding valuation and the sheer giddy feeling OutlookSoft shareholders must be enjoying tonight, I think this take is, at a minimum, ironic. His view that SAP just wildly overpaid for an Excel planning tool that directly overlaps with the current technology they have been peddling sounds vaguely familiar...just change the order.

If you apply this spin to the Business Objects deal, then with an outlay of $300M, Business Objects just (over)paid for a back end consolidation plus planning tool set that directly overlaps with the current technology - an Excel front end planning tool - they have been peddling in the market for almost two years. Talk about rejoicing by the shareholders. The difference here is that the Cartesis shareholders are French, so the likelihood is that they are drinking champagne as well. Just better champagne. As my good friend Lance recently noted, Black is the new Black. Funny, he has a kettle at well.

They paid WHAT?

Kudos to all the happy stockholders of OutlookSoft today. We salute you, Mr. makethemoverpaysincetheyfeelleftbehindinthemarket software company seller. $485M dollars for an Excel front end planning tool that is a direct overlap on the current technology you’ve been peddling. Wow, just wow. Champagne all around.

Anyone Got a Light?

Pithy and trite plays on words aside, I’m going to go on record and say that I think the new branding from Business Objects is pretty strong. Now I say this as a personal opinion, not as a company spokesperson, as well as saying up front that I was on the team that chose the concept and creative ideas. Most interestingly, the same agency that did the Business Objects work, Eleven, also did earlier work for Hyperion (the professorial old-style pictures in black and white if you remember from a few years ago—ugh, and wow, what range!).

Brands are funny things to work on, and incredibly hard to get your hands around in the B2B space. There are some, but definitely only a few, technology brands that strong in the B2B space today—even the tech. companies that are most famous, like Apple, Google, Yahoo, Microsoft, and heck, even Intel, are all marketed to a consumer audience. In terms of B2B, maybe Cisco stands out, maybe IBM, maybe SAP and Oracle—but not many others, and we’re talking a population of hundreds of thousands of technology companies.

So it’s an ambitious task at the outset given your run of the mill budget constraints and issues of global reach. Does the brand translate across borders? Does it mean the same thing in Hong Kong as it does in Harrisburg? Tough to say and tough to predict. But fun to find out.

Which is why a project like the one the Business Objects has embarked on should be applauded and admired for its scope and ambition, if not its audacity and brazenness in a sea full of blandly branded software technology companies. Just standing out, of course and being a poser doesn’t move a market—just ask our friends at Blue Martini. But taking a new stand and being willing to look different as you take the stand, AND having people think of you differently BECAUSE of that new stand, now that’s a rare feat. And Business Objects is trying to cross that chasm right now. We won’t know for awhile if it was successful, but it will be fun watching the story unfold and I for one hope they make it.

SAP Buys Outlooksoft

Consolidation in financial analytics and performance management is happening at light speed with the announcement yesterday that SAP plans to acquire Outlooksoft. In their announcement, SAP clearly positions this as extending its solutions for the CFO's office and expanding its portfolio to include performance management. In SAP speak, they provide everything from governance, risk and compliance to performance management, while doing a little ERP as well.

Interestingly, SAP usually does not usually spend much time talking about performance management as a stand alone offering, yet with Hyperion buying Oracle and Business Objects buying Cartesis, SAP could not afford to be left on the sidelines. Paul Hammerman at Forrester indicates that this closes a gap around Planning in the SAP product line in his interview with SearchSAP and notes that SAP's Strategic Enterprise Management (SEM) was not great. Hammerman suggests that SAP is losing CPM deals to best of breed vendors like Hyperion and Cognos.

OutlookSoft had been all Microsoft, all the time, until recently when they expanded support for Oracle. Outlooksoft offers a nice Excel front-end tool and makes it easy to do custom planning, budgeting and forecasting. The capability is user friendly for finance teams who have grown up with Excel. The capabilities and ease of use are both things SAP customers will benefit from, but there is clearly some overlap with existing functionality, and OutlookSoft products are not going to be used like Hyperion or Cartesis for complex consolidations. John Haggerty from AMR research points this out specifically in his view of the SAP acquisition.

"When thinking of Outlooksoft, we picture an image of a solid, highly usable, prediction-focused planning, budgeting and forecasting system. Customers, many of which are divisions of larger organizations, have built very responsive and flexible planning systems with the product. The consolidation tool is decent, but used more for budgeting and forecasting roll ups and less for complex enterprise consolidations, which is what SAP customers will need and expect. "

I would suggest this is true for legacy SAP customers, but maybe less so for the next generation of SAP customers, who are smaller organizations. SAP has spent a lot of energy and money talking and marketing to the mid-market with NetWeaver, even spending on ads suggesting start ups use SAP. While there is little evidence to suggest this is true, SAP has been touting mid-market wins and spent many cycles at Saffire 2007 talking about the mid-market and their strategy.

SAP's Chairman Hasso Plattner unveiled SAP's focus on SaaS as part of their mid-market strategy at Software 2007 yesterday. His chalkboard slide set was interesting to those of us in the audience, but the strategy was not as warmly received by the media. (Thanks Darren). Regardless of whether you believe SAP will be successful with on-demand, the Outlooksoft acquisition will sell very well in the mid-market, be very applicable for existing SAP enterprise customers, especially at division and business line levels, and the concept of extending Outlooksoft into a SaaS option is not a big jump. The OutlookSoft offering with Oracle also gives them something else to sell into Oracle and Hyperion customers, many of them still running on OFA and Essbase that is way past its prime.

Very clearly the consolidation wave has crested. Will the last pure play financial analytics and performance management vendor please hit the lights on the way out.

Not everyone likes the light

Any sort of make over, especially when it happens at a reasonably large company, gets people chatting. It also brings out the arm chair critics. Business Objects launch of both style and substance this week is no exception. At the same time they announced a number of new products, they also gave themselves a makeover. See it here. Regardless of whether you can see the light, the good people at Valley Wag have already offered an opinion. Your vote?

TIBCO acquires Spotfire - Another One Bites the Dust

This just in from the land of M&A - TIBCO announced its intent to acquire Spotfire, a small BI vendor who positions themselves as next generation BI and analytics. However, this BI acquisition is different for a variety of reasons including who got bought, who did the buying and the fact that this really has less to do with BI and more to do with business process management and platforms. While many people have been writing about the intersection of BI, BPM, BAM and performance management, this time a player in BPM (as in business process) purchased a BI company. This represents one of the first acquisitions in the space and may well change the game for a variety of reasons.

TIBCO positions itself as a leader in BPM, but their focus and background is in integration centric process management. They tried to move up-stack and expand their footprint and relevance with the acquisition of Staffware a couple years ago, but they have had limited success in selling it. Gartner positions them as "process-aware middleware", but market reality is that they are an industrial strength ESB trying to come upstack to position themselves as a BPM player with focus on SOA - much the same aproach as BEA, just without the focus on application servers and aqua anything. They have clearly lacked optimization and analytics, something BPM vendors get very hot and bothered about. Enter Spotfire.

Spotfire positions themselves as the information insight company, and the leader in actionable analytics. They also position themselves as a leader and TIBCO promotes the same. Like most things, this is a function of what angle you look in the mirror. In the Gartner Magic Quadrant for BI Suites, published in January, Spotfire appeared for the first time, but smack in the bottom left quad. Gartner gives them credit as the only new entry in the category and calls out excellence in interactive analysis and in-memory analysis with capabilities for business analysts, not IT. This last piece is critically important to TIBCO and why this acquisition makes sense for all parties. Gartner also docks Spotfire for the things they don't have as a platform to compete in BI. Turns out maybe this is not about BI, especially not for TIBCO.

Among the things Gartner calls out is that Spotfire had limited channel strategy and reach. Joining the TIBCO family and getting access to their resources solves this problem in a big hurry. TIBCO's recognition that Spotfire gives them some sex appeal, solves their optimization gap and gives them something to talk about in analytics helps this make sense. It gives them something else to throw at market leaders like Savvion, Lombardi, and certainly BEA, who they most resemble. At a minimum this keeps things interesting.

A couple other observations:
1. There is not much precedent for infrastructure vendors to come up-stack and get relevant to business audiences in a business context like analytics and business intelligence. TIBCO's prior acquisition of Staffware for human centric process management has not proved to be successful to this audience, so this round either changes fortunes or looks like groundhog day.
2. The hype around optimization and analytics for process management by vendors and analysts just got a $200M validation. Does this signal something bigger?
3. The Gartner MQ for BI notes that the BI industry has now adopted a "process and strategy driven vision of BI." Interesting that the first real play in the space was not a BI company, but an integration focused BPM company putting their money where their website claims they are. Is the reality that BI is a nice add-on to BPM, not the other way around? Is the tail about to wag the dog?
4. The Gartner MQ notes an expectation of "co-mingling" between BI and BPM and calls out TIBCO and BEA by name. How long have these vendors been talking to Gartner about this? Who is next?

Interesting that today BEA announced a miss and the impact was speculation that BEA is next on the block to be acquired by Oracle or HP. Maybe we should be watching for BEA to make a play for a BI vendor. Look for things to get even more interesting.