Microsoft, the company that managed to put its operating system into 95% of the computers on the planet, is now hoping to put its PerformancePoint Server application in every midsize business in the country. It has its work cut out for it.
First, business performance management (BPM) is a relatively new concept for the middle market–only 10% to 20% of middle market companies use the tool–so there will be the inevitable education process. Second, Microsoft is far from the only company to recognize the potential in midsize players. Business Objects is a regular in the middle market, but now even the likes of Hyperion and the ERP vendors are figuring out how to make their BPM/BI products work for midsize enterprises.
Still, brand recognition and compatibility with the sacred spreadsheet give Microsoft an edge. The software giant recently announced that it was releasing portions of its PerformancePoint software to companies and that early reports from its beta testing have been positive, says Michael Smith, director of marketing for PerformancePoint.
Recommended For You
Historically, he says, BPM applications have been expensive on a per-user basis and difficult to implement, usually requiring a major training program, a large IT staff and the deep pockets of a mega corporation. The conceit of PerformancePoint is that it makes BPM inexpensive and easier to use. "By making Microsoft Office the front end," Smith claims, "this system is accessible to anyone who knows how to use a spreadsheet." The goal, Microsoft's Smith says, is to "democratize performance management."
Smith explains: "What we're doing with PerformancePoint is turning the spreadsheet into a user interface. When you use a spreadsheet with PerformancePoint, it isn't saved simply as a spreadsheet; it goes right into the central database. That increases security–you don't have a lot of spreadsheets floating around–but it also makes that data available within the company, and with consistent rules and standards."
The application, slated for release sometime in the middle of this year, will enable a smaller company to enter the preserve of giant corporations using pricey BPM solutions when it comes to planning, budgeting and modeling capabilities, Smith says.
John Van Decker, a vice president for research at Gartner Inc., agrees that Microsoft's PerformancePoint will "shake up" the BPM market, particularly in the midcap corporate sector. But it's not always an open-and-shut sale–pitting IT, which likes the compatibility of Microsoft, against finance, which sometimes prefers best-of-breed tools.
Take the situation at Anthony & Sullivan Pools, a $200-million-plus swimming pool installer based in Doylestown, Pa., which is one of Microsoft's PerformancePoint beta testers. Anthony & Sullivan CIO Anthony Pizzelanti is a strong advocate, expecting PerformancePoint to provide control over budget planning and forecasting. "We're in 16 states and have 14 businesses, each a profit center," he says. "This has to be better than doing all that work with Excel spreadsheets." But he is up against a somewhat wary finance department that is used to using Business Objects.
Daniel Schwartz, president of BIO Analytics Corp., a Stamford, Conn.-based consultancy, says he's not surprised at the Anthony & Sullivan finance department's perspective. In the midcap market, there has not been much talk until now about performance management, he reports, and where there is interest, it is in operational analytics, not so much in strategic planning. "What the manager of a smaller company wants," says Schwartz, "is something that tells him, 'Call Customer X. He usually orders every three weeks and this week, he hasn't called.'"
Schwartz says that the new Microsoft BPM software is bound to "create a buzz" and start managers at smaller companies looking seriously into the idea of performance management, but he adds, "I don't see a big impact, at least initially. This is going to be an evolutionary thing."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
