MS bolsters its BI portfolio with ProClarity acquisition

Analyst says deal represents a bid by Microsoft to become a Business Intelligence vendor.

Microsoft has agreed to buy privately held business intelligence specialist ProClarity as part of its strategy to develop a BI portfolio.

The terms of the deal, which is expected to close in early May, haven’t been disclosed.

ProClarity, which develops business analysis and visualisation software for culling information from Microsoft SQL Server and exposing it to business users, was already a Microsoft partner when the deal was announced. The acquisition fits with Microsoft’s goal to become a prominent player in the BI market against competitors such as Business Objects and Cognos, says Microsoft spokesman Chris Caren.

Microsoft plans to use ProClarity’s technologies in conjunction with its SQL Server 2005 database and Office Business Scorecard Manager 2005, Office Excel and Office SharePoint Portal Server products. ProClarity’s BI software is built to be deployed exclusively on SQL Server, allowing users to tap into database information to view business metrics and other analytical information concerning business performance, Caren says.

Users can also query SQL Server for specific information using ProClarity’s software, and that information can come to the surface through Scorecard Manager, Excel or SharePoint Portal.

Keith Gile, a principal analyst with Forrester Research, says the acquisition “fills a gaping hole” for Microsoft and positions it more competitively as a BI vendor.

He says Microsoft’s investment in BI is fairly new and there hasn’t been a link between the back-end data mining and reporting services in the SQL Server database and the front-end interfaces business customers use. The acquisition of ProClarity addresses that, he says.

“Office is a great consumer tool for BI, but it’s not a great producer tool — it’s not a mechanism for building, but [for] surfacing the results,” he says.

“ProClarity is a good tool to [produce BI results]. It’s strong at building queries, dashboards and analysis on top of the Microsoft platform.”

In addition to adding heft to Microsoft’s BI portfolio, ProClarity also bolsters its BI sales team, Caren says.

Over the past few years, Microsoft has increased its emphasis on having a comprehensive BI portfolio. In particular, it is promoting the next release of its Office suite, Office 2007, as not only a package for productivity but also for BI, in an effort to encourage customers to upgrade. Office is the front-end interface to Microsoft’s BI strategy, allowing users to see the results of business information extracted from SQL Server.

Office 2007 is expected to be available to business customers at the end of this year, with end-user versions becoming available in January.

Caren acknowledges that, as Microsoft continues to build out its BI strategy, it will pose a greater competitive threat to software partners on which it has depended in the past to enhance its products with BI capabilities. However, he says those partners will still be able to pair their software with Microsoft’s platform to build industry-specific BI packages.

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